Domtar (UFS) Upgraded to “Buy” at Zacks Investment Research
Zacks Investment Research upgraded shares of Domtar (NYSE:UFS) (TSE:UFS) from a hold rating to a buy rating in a report published on Wednesday. They currently have $56.00 price objective on the basic materials company’s stock.
According to Zacks, “Domtar is seeking growth through profitable investment opportunities with a commitment to pollution-free environment and sustainable practices. The company is also streamlining the cost structure, improving revenue quality and maintaining a healthy cash flow. Domtar is executing well on its strategy to expand its fiber-based business through acquisitions, strategic investments in capacity building and repurposing of assets. At the same time, Domtar continues to streamline its network to build a more cost-competent distribution channel. The company’s investment strategy takes a holistic view of the rapidly evolving market and deploys a dynamic capital allocation approach to execute its growth strategy. Domtar has outperformed the industry year to date. However, strengthening U.S. dollar against pulp purchasing currencies is expected to hamper price realizations of Domtar's pulp products.”
UFS has been the subject of several other research reports. ValuEngine raised Domtar from a hold rating to a buy rating in a report on Friday, September 8th. Scotiabank set a $41.00 price target on Domtar and gave the company a sector perform rating in a report on Monday, October 30th. National Bank Financial boosted their price target on Domtar from $42.00 to $46.00 and gave the company a sector perform rating in a report on Monday, October 30th. KeyCorp set a $33.00 price target on Domtar and gave the company a sell rating in a report on Thursday, October 12th. Finally, Stephens started coverage on Domtar in a research note on Tuesday, October 24th. They issued an equal weight rating and a $43.00 price objective for the company. Three equities research analysts have rated the stock with a sell rating, six have assigned a hold rating and five have given a buy rating to the stock. The stock currently has an average rating of Hold and a consensus target price of $43.80.
Domtar (NYSE:UFS) (TSE:UFS) last released its quarterly earnings results on Friday, October 27th. The basic materials company reported $1.03 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.73 by $0.30. Domtar had a return on equity of 9.93% and a net margin of 5.42%. The business had revenue of $1.29 billion during the quarter, compared to analyst estimates of $1.26 billion. During the same quarter in the previous year, the company posted $1.13 earnings per share. Domtar’s revenue for the quarter was up 1.7% on a year-over-year basis. equities research analysts expect that Domtar will post 2.64 EPS for the current fiscal year.
The firm also recently disclosed a quarterly dividend, which will be paid on Monday, January 15th. Stockholders of record on Tuesday, January 2nd will be paid a $0.415 dividend. This represents a $1.66 dividend on an annualized basis and a dividend yield of 3.34%. The ex-dividend date is Friday, December 29th. Domtar’s dividend payout ratio (DPR) is 59.50%.
Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Parametric Portfolio Associates LLC boosted its stake in Domtar by 3.1% during the third quarter. Parametric Portfolio Associates LLC now owns 451,395 shares of the basic materials company’s stock valued at $19,586,000 after buying an additional 13,549 shares during the last quarter. AXA bought a new position in Domtar during the third quarter valued at approximately $6,530,000. Shelton Capital Management bought a new position in Domtar during the third quarter valued at approximately $206,000. California Public Employees Retirement System boosted its stake in Domtar by 1.9% during the third quarter. California Public Employees Retirement System now owns 255,794 shares of the basic materials company’s stock valued at $11,099,000 after buying an additional 4,678 shares during the last quarter. Finally, Cubist Systematic Strategies LLC boosted its stake in Domtar by 176.1% during the third quarter. Cubist Systematic Strategies LLC now owns 2,905 shares of the basic materials company’s stock valued at $126,000 after buying an additional 1,853 shares during the last quarter. 91.01% of the stock is owned by hedge funds and other institutional investors.
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Domtar Company Profile
Domtar Corporation designs, manufactures, markets and distributes a range of fiber-based products, including communication papers, specialty and packaging papers and absorbent hygiene products. The Company segments include Pulp and Paper and Personal Care. The Pulp and Paper segment consists of the design, manufacturing, marketing and distribution of communication, specialty and packaging papers, as well as softwood, fluff and hardwood market pulp.
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