Topic: How To Invest

Pat: Could I please have your recommendation on Stella-Jones? Thank you.

Article Excerpt

Stella-Jones Inc., $49.00, symbol SJ on Toronto (Shares outstanding: 69.1 million; Market cap: $3.4 billion; www.stella-jones.com), makes pressure-treated wood products. They include: railway ties (45% of sales); utility poles (34%); treated lumber products for the residential market (12%); lumber for industrial uses such as construction timbers and highway guardrails (6%); and logs and lumber (3%). The company gets most of its utility poles from timberlands that it leases in Quebec and B.C. It also buys wood for railway ties and other products from sawmills in the U.S. and Canada. The U.S. also provides 82% of its sales, while Canada supplies the remaining 18%. Stella-Jones’s sales jumped 139.3%, from $651.6 million in 2011 to $1.6 billion in 2015. Earnings soared 153.9%, from $55.7 million to $141.4 million. Due to more shares outstanding, earnings per share rose at the slower pace of 134.5%, from $0.87 to $2.04 (all per-share amounts adjusted for a 4-for-1 stock split in October 2013). The gains are mainly due to acquisitions…

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