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 (+0.00%)

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 This Stock a Buy?
The Motley Fool Canada - Oct 19, 2017
Teck's stock fell back to $20 through the first half of 2017 as the commodity rallies cooled off. Coal slipped from above US$300 per tonne in November to about US$150, and Teck expects the Q3 2017 realized price to be about US$160. Copper and zinc took ...
EPS for Teck Resources Ltd (USA) (TECK) Expected At $0.81; Tocqueville Asset ... - UtahHerald.com
Teck Resources Ltd (USA) (TECK) Reaches $22.86 After 9.00% Up Move; Cs Mckee ... - Key Gazette
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.
Why Shares in Teck Resources Ltd. Appear Ready to Soar
The Motley Fool Canada - Oct 9, 2017
The reason Teck Resources and China are so inextricably linked is because Chinese demand drives much of the market for everything that Teck digs out of the ground, from metallurgical coal to copper, zinc, and lead. Metallurgical coal is particularly ...
EPS for Teck Resources Ltd (USA) (TECK) Expected At $0.81 - KL Daily
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 ... With the Bank of Canada raising interest rates along with many other central banking counterparts, this is putting pressure on the U.S. dollar. As a result ...
Teck Resources Ltd.: Is the Pullback Complete?
The Motley Fool Canada - Sep 27, 2017
In an update released earlier this month, Teck said it expects to see an average realized coal sale price of US$158-163 per tonne for Q3 2017.
Impala Asset Management Has Increased Its Teck Resources LTD (TCK) Position ... - UtahHerald.com
Why Is the Outlook for Teck Resources Ltd. Deteriorating?
The Motley Fool Canada - Oct 2, 2017
The outlook for steel-making coal and base metals miner Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) ... The latest reports out of China coupled with rising interest rates and a stronger U.S. dollar add up to be bad news for Teck. While it is doubtful ...
Tyrus Capital Sam Has Lowered Its Teck Resources LTD (TCK) Position by $3.81 ... - KL Daily
As Teck Resources LTD (TCK) Market Valuation Were Volatile, Tyrus Capital Sam ... - BZ Weekly
Analysts See $0.81 EPS for Teck Resources Ltd (USA) (TECK)
Press Telegraph - Oct 19, 2017
Wall Street await Teck Resources Ltd (USA) (NYSE:TECK) to release earnings on October, 26. Analysts forecast EPS of $0.81, up exactly $0.61 or 305.00 % from 2014's $0.2 EPS.
Millennium Management Has Increased Teck Resources LTD (TCK) Holding; Fate ...
Herald KS - 3 hours ago
Teck Resources Ltd now has $13.09 billion valuation. The stock rose 1.66% or $0.37 reaching $22.66 per share. About 3.46 million shares traded.
Teck Resources LTD (TCK) Shareholder Impala Asset Management LLC Has Raised ...
WeeklyHub - Oct 13, 2017
More notable recent Teck Resources Ltd (USA) (NYSE:TECK) news were published by: Fool.ca which released: “Why Shares in Teck Resources Ltd.
As Teck Resources LTD (TCK) Market Valuation Were Volatile, Impala Asset ... - KL Daily
$0.81 EPS Expected for Teck Resources Ltd (USA) (TECK); Shorts at MECHANICAL ... - Key Gazette
Teck Resources Ltd (USA) (TECK) Reaches $22.66 After 5.00% Up Move; Acxiom ...
UtahHerald.com - Oct 10, 2017
The stock of Teck Resources Ltd (USA) (NYSE:TECK) is a huge mover today! About 1.69M shares traded. Teck Resources Ltd (USA) (NYSE:TECK) has risen 92.88% since October 10, 2016 and is uptrending. It has outperformed by 76.18% the S&P500.
EPS for Teck Resources Ltd (USA) (TECK) Expected At $0.81; Tidewater (TDW ... - HuronReport
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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