Quebecor, Inc. – Value Analysis (US OTC:QBCRF) : December 29, 2017

Capitalcube gives Quebecor, Inc. a score of 31.

Our analysis is based on comparing Quebecor, Inc. with the following peers – Rogers Communications Inc. Class B, Quebecor Inc. Class B, Netflix, Inc. and Shaw Communications Inc. Class B (RCI-US, QBR.B-CA, NFLX-US and SJR-US).

Investment Outlook

Quebecor, Inc. has a fundamental score of 31 and has a relative valuation of UNDERVALUED.

Fundamental Score

Access our research and ratings on Quebecor, Inc.

Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • It’s current Price/Book of 3.10 is about median in its peer group.
  • We classify QBCRF-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • QBCRF-US‘s relative asset efficiency and net profit margins are both around the median level.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • QBCRF-US‘s return on assets has improved from below median to about median among its peers over the last five years.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • QBCRF-US‘s revenues have grown more slowly than the peer median over the last few years, which combined with the stock price’s relatively low P/E ratio suggests substandard growth expectations relative to peers.
  • The company’s relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
  • QBCRF-US seems to be constrained by the current level of debt.

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Leverage & Liquidity

QBCRF-US is debt-constrained.

  • With debt at a relatively high 55.73% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 47.34%), and interest coverage level of 2.85x, QBCRF-US seems debt-constrained.
  • All 4 peers for the company have an outstanding debt balance.

QBCRF-US has maintained its relatively high leverage profile from the recent year-end.

  • QBCRF-US‘s interest coverage is its highest relative to the last five years and compares to a low of 2.10x in 2013.
  • Though its interest coverage has remained relatively stable at 2.85x compared to 2016, its peer median has increased to 3.66x from 2.63x during this period.
  • Interest coverage fell 0.81 points relative to peers.
  • QBCRF-US‘s debt-EV is less than (but within one standard deviation of) its five-year average debt-EV of 57.29%.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (55.73%) and the peer median (47.34%).

Access the detailed analysis for Quebecor, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Rogers Communications Inc. Class B 38.95 0.41 3.94 23.79
Quebecor Inc. Class B 55.73 1.42 2.84 20.19
Netflix, Inc. N/A 1.2 3.66 -39.29
Shaw Communications Inc. Class B 23.99 0.8 3.97 31.68
Quebecor Inc. Class B 55.73 1.42 2.85 19.98
Peer Median 47.34 1.2 3.66 20.19
Best In Class 23.99 1.42 3.97 31.68

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Company Profile

Quebecor, Inc. engages in the provision of telecommunications, entertainment, and news media services. It operates through the following business segments: Broadcasting and Production, Magazines, and Film Production and Audiovisual Services. The Broadcasting and Production segment creates, produces and broadcasts entertainment, information and public affairs programming, and involves in the commercial production. The Magazines segment offers Publications and Publications Charron, publishes French and English language magazines in fields such as the arts, entertainment, television, fashion, sports, and decoration and markets digital products. The Film Production and Audiovisual Services segment provides soundstage and equipment rental, dubbing, as well as postproduction and visual effects services. The company was founded by Pierre Peladeau on January 8, 1965 and is headquartered in Montreal, Canada.

Disclaimer

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