TCK  Teck Resources Ltd

Exchange

NYSE

Sector

Basic Industries

Industry

Mining & Quarrying of Nonmetallic Minerals (No Fuels)

Market Cap.

14.62B

Vuru Grade

21.02/100

Current Price

$25.36
+0.87 (+3.55%)

Growth Price

$26.31
Fairly valued

Company Metrics

  • P/E 14.61
  • P/S 2.5
  • P/B 1.18
  • EPS -0.15
  • Cash ROIC 2.66%
  • Cash Ratio 1.09
  • Dividend 0.07 / 0.33%
  • Avg. Vol. 8.51M
  • Shares 576.50M
  • Market Cap. 14.62B

Company Description

Teck Resources Limited operates as a diversified mining, mineral processing, and metallurgical company. The company engages in a range of activities related to mining, including exploration, development, smelting, refining, safety, environmental protection, product stewardship, recycling, and research. It produces copper and metallurgical coal; zinc, lead, and molybdenum concentrates; specialty me... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Teck Resources Ltd.: Is the Stock Price Going Back to $60?
The Motley Fool Canada - Aug 18, 2017
Coal would probably have to surge again for Teck to take a run at $60 in the coming months. At this point, that's not likely to happen, as last year's rally was primarily driven by policy changes in China that limited the number of days a mine can ...
This Is Why Teck Resources Ltd. Is up 50% Over the Past 2 Months
The Motley Fool Canada - Aug 14, 2017
It's been a wild ride for shareholders of Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) over the past 18 months, but then again, that's really nothing new for this company.
Teck Resources Stock Gains Set To Stall In The Near Term? - Investing.com
As Oil Dri Amer (ODC) Share Value Declined, Needham Investment Management Has ... - San Times
Teck Resources Ltd.: Is a New Rally Underway?
The Motley Fool Canada - Jul 10, 2017
Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) has bounced 15% off the June low, and investors are wondering if this is the beginning of a broader move to the upside.
Analysts See $0.97 EPS for Teck Resources Ltd (USA) (TECK) - Weekly Register
You Must Have Nerves of Steel to Buy Teck Resources Ltd.
The Motley Fool Canada - Jun 22, 2017
Natural resources are required to produce the goods you consume. But to get those resources, you need to extract them from nature.
Contrarian Investors: Should You Buy Teck Resources Ltd. Today?
The Motley Fool Canada - Jul 18, 2017
As a result, met coal prices fell back to US$150 in the first part of 2017. Teck is expected to report a Q2 2017 average realized coal sale price of US$160-165 per tonne. Copper and zinc also saw their rallies stall out in the beginning of this year ...
Impala Asset Management LLC Has Decreased Its Teck Resources LTD (TCK) Holding ... - WeeklyHub
Will Teck Resources Ltd. Experience Another Epic Rally?
The Motley Fool Canada - Aug 4, 2017
Notably, for investors concerned about its financial health, Teck used the sharp uptick in cash flow to reduce its debt by a massive 21% to a more manageable US$4.9 billion. The miner's balance sheet will only get stronger. During the second quarter ...
Teck Resources LTD (Call) (TCK) Holder Tyrus Capital Sam Has Decreased Holding ... - KL Daily
Teck Resources Ltd. Down 18% in 1 Week: Now What?
The Motley Fool Canada - Jun 19, 2017
Last week was certainly not a positive one for Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) ... In Q1, its average price was US$213 (~$283) per tonne, but it's now expecting to only generate anywhere from US$160-165 (~$211-218) per tonne. Originally ...
Teck Resources Ltd (USA) (TECK) Balance Sheet Has Significantly Improved Over ... - Smаrt Stоck Nеws
Will Teck Resources Ltd. Be a 10-Bagger?
The Motley Fool Canada - Dec 1, 2016
Teck Resources Ltd. (TSX:TCK.B)(NYSE:TCK) has done the unimaginable. Only a year ago, investors were wondering whether Teck would survive the commodity glut. Shares were trading around $3.80, and the expectation was that it would go much lower. Fast ...
Is Teck Resources Ltd. Going Under $5 Again?
The Motley Fool Canada - Jun 7, 2017
Long-time investors in Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) will remember the sell-off ... In 2015, the low share price was an abysmal $3.65, which coincided with when the previous U.S. president took aim at coal. Following the departure of Mr.
Teck Resources Ltd.: A Company Out of Favour
The Motley Fool Canada - Jul 5, 2017
Financial markets are sometimes very capricious. Over the past five years, shares of Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) have seen a lot of action. The share price dropped from a high price above $38 during 2013 to a low price of $3.65 in the ...
Teck Resources Ltd (USA) (TECK)'s Stock Is Buy After Today's Big Increase - AppsforPCdaily
$2.06 Billion in Sales Expected for Teck Resources Ltd (TECK) This Quarter - ClickLancashire
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for TCK to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate TCK's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$25.36 Current Price

$26.31 Growth Price (DCF)

Fairly valued


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: -13.9%


Discount Rate: 15.0%


TCK's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$33.03 Book Price

Undervalued by 30.23%


Poor Cash Return on Invested Capital over the past 5 years

TCK has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

TCK has only created $2.66 of cash for every $100 invested.
Figures in CAD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 2.72B 986.00M 276.00M 65.00M -293.00M
divided by
Invested Capital 27.69B 29.53B 31.25B 32.40B 31.08B
Cash ROIC 9.83% 3.34% 0.88% 0.20% -0.94%

Poor Return on Equity over the past 5 years

TCK has shown an inability to deliver strong results for shareholders. This could be due to poor management, TCK operating in a highly competitive industry, or having a weak business in general.

TCK has only generated $2.46 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in December
20112012201320142015
Net Income 2.67B 870.00M 1.01B 382.00M -2.48B
divided by
Stockholders' Equity 17.72B 17.80B 18.60B 18.61B 16.41B
Return on Equity 15.06% 4.89% 5.43% 2.05% -15.14%

Excellent Business Performance over the past 10 years

TCK has been able to maintain profitability in good times and bad. This could mean TCK has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

TCK has created positive free cash flow for 9 or more of the past 10 years.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 2.42B 1.15B 1.23B 2.38B 1.93B 2.72B 986.00M 276.00M 65.00M -293.00M

Weak Balance Sheet

TCK's financial position is not ideal. The key is to check whether TCK is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 5.28B 1.41B 860.85M 1.33B 832.00M 4.41B 3.27B 2.77B 2.03B 1.89B
Current Assets 6.90B 3.01B 4.10B 3.68B 3.31B 7.39B 6.57B 5.77B 4.92B 4.81B
Total Assets 11.45B 13.57B 31.53B 29.87B 29.21B 34.22B 34.62B 36.18B 36.84B 34.69B
Current Liabilities 1.69B 1.35B 9.28B 2.37B 1.74B 2.12B 1.82B 2.16B 2.41B 1.73B
Total Liabilities 4.90B 5.85B 20.63B 15.38B 13.16B 16.50B 16.82B 17.59B 18.23B 18.28B
Stockholder' Equity 6.55B 7.72B 10.90B 14.49B 16.05B 17.72B 17.80B 18.60B 18.61B 16.41B
Current Ratio 4.08 2.23 0.44 1.55 1.90 3.48 3.61 2.67 2.04 2.78
TL-to-TA 0.43 0.43 0.65 0.51 0.45 0.48 0.49 0.49 0.49 0.53

Low or No Reinvestment of Profits over the past 10 years

TCK has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to TCK operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 4.23B 5.04B 5.48B 7.31B 8.87B 10.86B 11.02B - - 9.17B
Retained Earnings Growth - 19.24% 8.69% 33.44% 21.42% 22.39% 1.46% -100.00% - -

Inconsistent Net Profit Margins over the past 10 years

TCK potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$13.38 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 2.43B 1.61B 659.30M 1.83B 1.98B 2.67B 870.00M 1.01B 382.00M -2.48B
divided by
Revenue 6.54B 6.37B 6.90B 7.67B 9.34B 11.51B 10.34B 9.38B 8.60B 8.26B
Net Profit Margin 37.18% 25.35% 9.55% 23.86% 21.15% 23.17% 8.41% 10.77% 4.44% -30.08%

Shrinking Pricing Power over the past 10 years

TCK has shrinking gross margins, suggesting that they are no longer able to set prices without consideration of the cost of goods sold. As gross margins shrink, TCK's flexibility to weather inflationary enviroments will diminish, which weakens their overall economic moat. Look at its future prospects to determine sustainability and whether the economic moat will continue to shrink or if it will rebound.

$35.34 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 3.82B 3.07B 2.89B 2.73B 3.56B 4.88B 3.07B 2.43B 1.53B 1.28B
divided by
Revenue 6.54B 6.37B 6.90B 7.67B 9.34B 11.51B 10.34B 9.38B 8.60B 8.26B
Gross Margin 58.49% 48.20% 41.93% 35.63% 38.07% 42.36% 29.64% 25.86% 17.77% 15.49%

High Capital Intensity over the past 10 years

TCK spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

151.36% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 488.12M 571.06M 938.56M 590.00M 810.00M 1.24B 1.81B 2.60B 2.21B 2.24B
divided by
Net Income 2.43B 1.61B 659.30M 1.83B 1.98B 2.67B 870.00M 1.01B 382.00M -2.48B
Capital Expenditure Ratio 20.08% 35.36% 142.36% 32.22% 41.01% 46.33% 207.93% 257.62% 579.32% -90.34%

Very Strong Dividend History over the past 10 years

TCK has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests TCK is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid 295.90M 426.06M 441.96M 69.00M 207.00M 408.00M 519.00M 559.00M 541.00M 401.00M
divided by
Shares Outstanding 421.20M 431.50M 452.10M 535.60M 589.50M 590.40M 585.50M 578.30M 577.19M 576.20M
Dividend Paid Per Share 0.70 0.98 0.97 0.13 0.35 0.69 0.88 0.96 0.93 0.69
Price at Year End 35.33 35.40 4.75 34.77 59.84 35.19 35.22 25.66 13.76 3.81
Dividend Yield 1.97% 2.77% 20.42% 0.37% 0.58% 1.95% 2.50% 3.74% 6.76% 18.12%

History of Stock Buybacks over the past 10 years

TCK has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in CAD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 421.20M 431.50M 452.10M 535.60M 589.50M 590.40M 585.50M 578.30M 577.19M 576.20M
Stock Bought Back - -2.39% -4.56% -15.59% -9.14% -0.15% 0.84% 1.25% 0.19% 0.17%
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