Domtar Corporation designs, manufactures, markets, and distributes communications papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally. It operates in two segments, Pulp and Paper, and Personal Care. The company was founded in 1848 and is based in Montreal, Canada.
UFS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Domtar CORP. To summarize, we found that Domtar CORP ranked in the 21th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. As for the metrics that stood out in our discounted cash flow analysis of Domtar CORP, consider:
The company's balance sheet shows it gets 57% of its capital from equity, and 43% of its capital from debt. Its equity weight surpasses that of just 23.59% of free cash flow generating stocks in the Basic Materials sector.
Its compound free cash flow growth rate, as measured over the past 5.7 years, is -0.11% -- higher than only 13.14% of stocks in our DCF forecasting set.
Domtar CORP's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -2.42. This coverage rate is greater than that of merely 16.68% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Domtar CORP? See OLN, AEHL, SCHN, AVNT, and WPM.
Investment thesis Domtar (UFS) is a company with a lot of history behind it that has been offering a ~4% dividend yield in recent years, until the current coronavirus pandemic hit their operations harshly, depressing the price to the point of leaving the dividend yield at 6.96% at a share...
Carles Diaz Caron on Seeking Alpha | September 17, 2020
Domtar ([[UFS]] +2%) shares cap off a strong week after Citi upgrades to Buy from Neutral with a $34 price target, on prospects for value creation following last week's strong quarterly report.Citi analyst Anthony Pettinari says July data shows improvement in demand for North American uncoated freesheet paper; demand recovery...