Intrinsic value of Superior Plus Corp. - SPB

Previous Close

$12.36

  Intrinsic Value

$1.27

stock screener

  Rating & Target

str. sell

-90%

Previous close

$12.36

 
Intrinsic value

$1.27

 
Up/down potential

-90%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of SPB stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Superior Plus Corp. (SPB) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -10.16
  8.60
  8.24
  7.92
  7.62
  7.36
  7.13
  6.91
  6.72
  6.55
  6.39
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
Revenue, $m
  2,024
  2,198
  2,379
  2,568
  2,763
  2,967
  3,178
  3,398
  3,626
  3,864
  4,111
  4,368
  4,636
  4,915
  5,205
  5,508
  5,825
  6,155
  6,499
  6,860
  7,236
  7,629
  8,041
  8,471
  8,922
  9,394
  9,888
  10,405
  10,947
  11,515
  12,110
Variable operating expenses, $m
 
  2,205
  2,385
  2,572
  2,767
  2,969
  3,179
  3,398
  3,625
  3,861
  4,107
  4,342
  4,609
  4,886
  5,175
  5,476
  5,791
  6,119
  6,462
  6,820
  7,194
  7,585
  7,994
  8,422
  8,870
  9,339
  9,830
  10,344
  10,883
  11,448
  12,040
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,873
  2,205
  2,385
  2,572
  2,767
  2,969
  3,179
  3,398
  3,625
  3,861
  4,107
  4,342
  4,609
  4,886
  5,175
  5,476
  5,791
  6,119
  6,462
  6,820
  7,194
  7,585
  7,994
  8,422
  8,870
  9,339
  9,830
  10,344
  10,883
  11,448
  12,040
Operating income, $m
  151
  -7
  -6
  -5
  -4
  -3
  -1
  0
  1
  3
  4
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  47
  49
  52
  55
  58
  61
  64
  67
  71
EBITDA, $m
  272
  123
  133
  143
  154
  166
  177
  190
  202
  216
  230
  244
  259
  274
  291
  308
  325
  344
  363
  383
  404
  426
  449
  473
  498
  524
  552
  581
  611
  643
  676
Interest expense (income), $m
  34
  26
  30
  34
  38
  42
  47
  51
  56
  61
  66
  72
  78
  83
  90
  96
  103
  110
  117
  125
  133
  141
  150
  159
  168
  178
  189
  200
  211
  223
  236
Earnings before tax, $m
  151
  -33
  -36
  -38
  -42
  -45
  -48
  -51
  -55
  -59
  -62
  -46
  -51
  -55
  -59
  -64
  -69
  -74
  -79
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -131
  -139
  -147
  -156
  -165
Tax expense, $m
  37
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  295
  -33
  -36
  -38
  -42
  -45
  -48
  -51
  -55
  -59
  -62
  -46
  -51
  -55
  -59
  -64
  -69
  -74
  -79
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -131
  -139
  -147
  -156
  -165

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,848
  2,002
  2,167
  2,338
  2,517
  2,702
  2,894
  3,095
  3,303
  3,519
  3,744
  3,978
  4,222
  4,476
  4,741
  5,017
  5,305
  5,605
  5,919
  6,247
  6,590
  6,948
  7,323
  7,715
  8,126
  8,555
  9,005
  9,476
  9,970
  10,487
  11,030
Adjusted assets (=assets-cash), $m
  1,843
  2,002
  2,167
  2,338
  2,517
  2,702
  2,894
  3,095
  3,303
  3,519
  3,744
  3,978
  4,222
  4,476
  4,741
  5,017
  5,305
  5,605
  5,919
  6,247
  6,590
  6,948
  7,323
  7,715
  8,126
  8,555
  9,005
  9,476
  9,970
  10,487
  11,030
Revenue / Adjusted assets
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
  1.098
Average production assets, $m
  1,002
  1,088
  1,178
  1,271
  1,368
  1,469
  1,573
  1,682
  1,795
  1,913
  2,035
  2,162
  2,295
  2,433
  2,577
  2,727
  2,883
  3,047
  3,217
  3,395
  3,582
  3,777
  3,980
  4,193
  4,416
  4,650
  4,894
  5,151
  5,419
  5,700
  5,995
Working capital, $m
  105
  127
  138
  149
  160
  172
  184
  197
  210
  224
  238
  253
  269
  285
  302
  319
  338
  357
  377
  398
  420
  443
  466
  491
  517
  545
  573
  603
  635
  668
  702
Total debt, $m
  529
  603
  685
  770
  858
  950
  1,046
  1,145
  1,248
  1,355
  1,467
  1,583
  1,704
  1,830
  1,961
  2,098
  2,241
  2,390
  2,546
  2,709
  2,879
  3,056
  3,242
  3,437
  3,640
  3,853
  4,077
  4,310
  4,555
  4,812
  5,081
Total liabilities, $m
  919
  993
  1,075
  1,160
  1,248
  1,340
  1,436
  1,535
  1,638
  1,745
  1,857
  1,973
  2,094
  2,220
  2,351
  2,488
  2,631
  2,780
  2,936
  3,099
  3,269
  3,446
  3,632
  3,827
  4,030
  4,243
  4,467
  4,700
  4,945
  5,202
  5,471
Total equity, $m
  929
  1,009
  1,092
  1,179
  1,268
  1,362
  1,459
  1,560
  1,664
  1,774
  1,887
  2,005
  2,128
  2,256
  2,389
  2,528
  2,674
  2,825
  2,983
  3,149
  3,321
  3,502
  3,691
  3,889
  4,095
  4,312
  4,539
  4,776
  5,025
  5,286
  5,559
Total liabilities and equity, $m
  1,848
  2,002
  2,167
  2,339
  2,516
  2,702
  2,895
  3,095
  3,302
  3,519
  3,744
  3,978
  4,222
  4,476
  4,740
  5,016
  5,305
  5,605
  5,919
  6,248
  6,590
  6,948
  7,323
  7,716
  8,125
  8,555
  9,006
  9,476
  9,970
  10,488
  11,030
Debt-to-equity ratio
  0.569
  0.600
  0.630
  0.650
  0.680
  0.700
  0.720
  0.730
  0.750
  0.760
  0.780
  0.790
  0.800
  0.810
  0.820
  0.830
  0.840
  0.850
  0.850
  0.860
  0.870
  0.870
  0.880
  0.880
  0.890
  0.890
  0.900
  0.900
  0.910
  0.910
  0.910
Adjusted equity ratio
  0.501
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  295
  -33
  -36
  -38
  -42
  -45
  -48
  -51
  -55
  -59
  -62
  -46
  -51
  -55
  -59
  -64
  -69
  -74
  -79
  -85
  -91
  -97
  -103
  -109
  -116
  -124
  -131
  -139
  -147
  -156
  -165
Depreciation, amort., depletion, $m
  121
  130
  139
  148
  158
  168
  179
  190
  201
  213
  225
  218
  232
  246
  260
  275
  291
  308
  325
  343
  362
  381
  402
  424
  446
  470
  494
  520
  547
  576
  606
Funds from operations, $m
  70
  97
  103
  110
  117
  124
  131
  138
  146
  155
  163
  172
  181
  191
  201
  211
  222
  234
  246
  258
  271
  285
  299
  314
  330
  346
  363
  381
  400
  420
  440
Change in working capital, $m
  -77
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  35
Cash from operations, $m
  147
  87
  93
  99
  105
  112
  119
  126
  133
  141
  149
  157
  166
  175
  184
  194
  204
  215
  226
  237
  249
  262
  275
  289
  304
  319
  335
  351
  369
  387
  406
Maintenance CAPEX, $m
  0
  -101
  -110
  -119
  -128
  -138
  -148
  -159
  -170
  -181
  -193
  -206
  -218
  -232
  -246
  -260
  -275
  -291
  -308
  -325
  -343
  -362
  -381
  -402
  -424
  -446
  -470
  -494
  -520
  -547
  -576
New CAPEX, $m
  -98
  -87
  -90
  -93
  -97
  -101
  -105
  -109
  -113
  -118
  -122
  -127
  -133
  -138
  -144
  -150
  -157
  -163
  -171
  -178
  -186
  -195
  -204
  -213
  -223
  -234
  -245
  -256
  -268
  -281
  -295
Cash from investing activities, $m
  292
  -188
  -200
  -212
  -225
  -239
  -253
  -268
  -283
  -299
  -315
  -333
  -351
  -370
  -390
  -410
  -432
  -454
  -479
  -503
  -529
  -557
  -585
  -615
  -647
  -680
  -715
  -750
  -788
  -828
  -871
Free cash flow, $m
  439
  -101
  -107
  -113
  -120
  -127
  -134
  -142
  -150
  -158
  -167
  -176
  -185
  -195
  -206
  -216
  -228
  -240
  -253
  -266
  -280
  -294
  -310
  -326
  -343
  -361
  -380
  -399
  -420
  -442
  -465
Issuance/(repayment) of debt, $m
  -319
  79
  82
  85
  88
  92
  95
  99
  103
  107
  112
  116
  121
  126
  131
  137
  143
  149
  156
  163
  170
  178
  186
  194
  204
  213
  223
  234
  245
  257
  269
Issuance/(repurchase) of shares, $m
  0
  113
  119
  125
  131
  138
  145
  152
  160
  168
  176
  164
  173
  183
  193
  203
  214
  225
  237
  250
  263
  277
  292
  307
  323
  340
  358
  377
  396
  417
  438
Cash from financing (excl. dividends), $m  
  -331
  192
  201
  210
  219
  230
  240
  251
  263
  275
  288
  280
  294
  309
  324
  340
  357
  374
  393
  413
  433
  455
  478
  501
  527
  553
  581
  611
  641
  674
  707
Total cash flow (excl. dividends), $m
  107
  91
  94
  97
  100
  103
  106
  109
  113
  117
  121
  105
  109
  114
  119
  124
  129
  135
  141
  147
  153
  160
  168
  176
  184
  192
  201
  211
  221
  232
  243
Retained Cash Flow (-), $m
  -215
  -113
  -119
  -125
  -131
  -138
  -145
  -152
  -160
  -168
  -176
  -164
  -173
  -183
  -193
  -203
  -214
  -225
  -237
  -250
  -263
  -277
  -292
  -307
  -323
  -340
  -358
  -377
  -396
  -417
  -438
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -22
  -25
  -28
  -32
  -35
  -39
  -43
  -47
  -51
  -55
  -60
  -64
  -69
  -74
  -80
  -85
  -91
  -97
  -103
  -110
  -117
  -124
  -132
  -139
  -148
  -156
  -166
  -175
  -185
  -196
Discount rate, %
 
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
 
  -21
  -22
  -24
  -25
  -25
  -26
  -26
  -26
  -25
  -24
  -23
  -22
  -20
  -19
  -17
  -15
  -13
  -11
  -10
  -8
  -7
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
Current shareholders' claim on cash, %
  100
  94.0
  88.5
  83.5
  78.9
  74.7
  70.7
  67.0
  63.6
  60.4
  57.4
  54.9
  52.5
  50.3
  48.1
  46.1
  44.1
  42.2
  40.4
  38.7
  37.1
  35.6
  34.1
  32.6
  31.3
  30.0
  28.7
  27.5
  26.4
  25.3
  24.2

Superior Plus Corp. (Superior) is a Canada-based diversified business company. The Company operates through two segment: Energy Distribution and Specialty Chemicals. The Company's Energy Distribution operating segment provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels under Canadian propane division and the United States refined fuels division. The Company's Specialty Chemicals segment is a supplier of sodium chlorate and technology to the pulp and paper industry and a regional supplier of potassium and chlor-alkali products in the United States Midwest. Superior holds over 100% of Superior Plus LP (Superior LP). Superior's investments in Superior LP are financed by share capital and debentures. The Company operates Yankee Propane Inc and Virginia Propane Inc as subsidiaries.

FINANCIAL RATIOS  of  Superior Plus Corp. (SPB)

Valuation Ratios
P/E Ratio 6
Price to Sales 0.9
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 12
Price to Free Cash Flow 36
Growth Rates
Sales Growth Rate -10.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.2%
Cap. Spend. - 3 Yr. Gr. Rate 4.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 55%
Total Debt to Equity 56.9%
Interest Coverage 5
Management Effectiveness
Return On Assets 16.1%
Ret/ On Assets - 3 Yr. Avg. 8.1%
Return On Total Capital 19.5%
Ret/ On T. Cap. - 3 Yr. Avg. 8.3%
Return On Equity 35.9%
Return On Equity - 3 Yr. Avg. 16.9%
Asset Turnover 1
Profitability Ratios
Gross Margin 32.5%
Gross Margin - 3 Yr. Avg. 28.3%
EBITDA Margin 15.1%
EBITDA Margin - 3 Yr. Avg. 9.5%
Operating Margin 7.5%
Oper. Margin - 3 Yr. Avg. 3%
Pre-Tax Margin 7.5%
Pre-Tax Margin - 3 Yr. Avg. 3%
Net Profit Margin 14.6%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 24.5%
Eff/ Tax Rate - 3 Yr. Avg. 18.8%
Payout Ratio 34.6%

SPB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SPB stock intrinsic value calculation we used $2024 million for the last fiscal year's total revenue generated by Superior Plus Corp.. The default revenue input number comes from 2016 income statement of Superior Plus Corp.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SPB stock valuation model: a) initial revenue growth rate of 8.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.5%, whose default value for SPB is calculated based on our internal credit rating of Superior Plus Corp., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Superior Plus Corp..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SPB stock the variable cost ratio is equal to 100.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SPB stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.9% for Superior Plus Corp..

Corporate tax rate of 27% is the nominal tax rate for Superior Plus Corp.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SPB stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SPB are equal to 49.5%.

Life of production assets of 9.9 years is the average useful life of capital assets used in Superior Plus Corp. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SPB is equal to 5.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $929 million for Superior Plus Corp. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 143.218 million for Superior Plus Corp. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Superior Plus Corp. at the current share price and the inputted number of shares is $1.8 billion.

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Financial statements of SPB
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