Labrador Iron Ore (LIF) AI Stock Analysis

• Market Cap: C$1.92B
• Dividend Yield: 10.61%
• Average Volume (3M): 317.10K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.57
• Revenue Growth: 3.67%
• EPS Growth: -6.05%
• Country: CA
• Employees: 3
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Steel
• EPS (TTM): 2.73
• Shares Outstanding: 64,000,000
• 10 Day Avg. Volume: 379,310
• 30 Day Avg. Volume: 317,098
• PEG Ratio: 1.18
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.27
• Price to Cash Flow (P/CF): 10.30
• P/FCF Ratio: 10.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$33.50
• Price Target Upside: 16.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Labrador Iron Ore's strong financial stability with zero debt, efficient operations, and robust cash flow management are key strengths. The stock's positive technical indicators and attractive valuation further enhance its appeal, while the dividend announcement supports shareholder confidence. These factors collectively contribute to a solid overall stock score.

Positive Factors

Negative Factors

Production

Production during the quarter was 10% below forecast, affected by production interruptions due to forest fires.

Production Guidance

2024 production guidance for IOC has been reduced by 12%, negatively impacting the near-to-mid-term outlook for Labrador.

Sales Estimates

2024 iron ore sales estimates have been lowered by 5% due to reduced production guidance.

Labrador Iron Ore Business Overview & Revenue Model

Company Description

Labrador Iron Ore Royalty Corporation (LIF) is a Canadian company that primarily focuses on iron ore mining and extraction. It operates in the natural resources sector, specifically within the mining industry, and is engaged in the investment, exploration, and production of iron ore through its significant stake in Iron Ore Company of Canada (IOC). LIF provides shareholders with exposure to the iron ore market, offering investment opportunities tied to the fluctuations in iron ore prices and production outputs.

How the Company Makes Money

Labrador Iron Ore Royalty Corporation generates revenue primarily through its investment in the Iron Ore Company of Canada (IOC). LIF holds a 15.10% equity interest in IOC and earns income through royalties and equity dividends. The company receives a 7% royalty on all iron ore products produced, sold, and shipped by IOC, as well as a commission on IOC's gross sales revenue. This revenue model allows LIF to benefit from IOC's operational performance and iron ore market conditions. The company's earnings are significantly influenced by the global demand for iron ore, the production capacity of IOC, and prevailing market prices. Additionally, LIF's financial performance is impacted by its management of expenses and its strategic positioning within the iron ore supply chain.

Labrador Iron Ore Financial Statement Overview

Summary

Labrador Iron Ore demonstrates solid financial health with stable profitability and growth. It has zero debt, reflecting strong financial stability. Although there is a slight decline in net profit margin, the company maintains efficient operations with strong cash flow generation, making it well-positioned in the steel industry.

Income Statement

Labrador Iron Ore's income statement reflects a stable gross profit margin, with a slight increase from 83.5% in 2023 to 80.2% in 2024. However, the net profit margin decreased from 93.1% in 2023 to 84.3% in 2024, suggesting a decline in profitability. Revenue growth was modest at 3.7% from 2023 to 2024. The EBITDA margin is strong at 78.7% in 2024, indicating efficient operations.

Balance Sheet

The balance sheet shows a robust financial position with zero debt, resulting in a debt-to-equity ratio of 0. The equity ratio remains strong at 76.9% in 2024, indicating solid asset backing. ROE decreased slightly from 28.3% in 2023 to 27.2% in 2024, but remains healthy, highlighting efficient equity utilization.

Cash Flow

Cash flow metrics are strong with a free cash flow growth rate of 32.4% from 2023 to 2024. The operating cash flow to net income ratio is 1.15, suggesting good cash generation relative to net income. The free cash flow to net income ratio is also favorable at 1.15, indicating efficient cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
207.51M	200.17M	232.32M	279.47M	201.93M
	Gross Profit
166.34M	194.15M	179.76M	217.73M	155.71M
	EBIT
0.00	191.09M	21.48M	214.99M	146.40M
	EBITDA
163.28M	158.53M	183.63M	221.16M	152.59M
	Net Income Common Stockholders
175.04M	186.31M	265.45M	379.77M	227.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
42.30M	13.19M	39.90M	82.91M	106.09M
	Total Assets
836.13M	837.04M	825.76M	789.31M	823.22M
	Total Debt
0.00	0.00	0.00	0.00	0.00
	Net Debt
-42.30M	-13.19M	-39.90M	-82.91M	-106.09M
	Total Liabilities
193.19M	177.71M	188.31M	225.25M	256.85M
	Stockholders Equity
642.93M	659.33M	637.46M	564.06M	566.37M
Cash Flow		Free Cash Flow
201.91M	152.49M	184.19M	402.42M	175.43M
	Operating Cash Flow
201.91M	152.49M	184.19M	402.42M	175.43M
	Investing Cash Flow
0.00	0.00	0.00	0.00	0.00
	Financing Cash Flow
-172.80M	-179.20M	-227.20M	-425.60M	-147.20M

Labrador Iron Ore Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LIF, the sentiment is Negative. The current price of 28.74 is below the 20-day moving average (MA) of 29.53, below the 50-day MA of 29.80, and below the 200-day MA of 29.00, indicating a bearish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.01 is Neutral, neither overbought nor oversold. The STOCH value of 18.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:LIF.

Labrador Iron Ore Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LIF	78 Outperform	C$1.92B	10.98	26.88%	10.61%	3.67%	-6.05%
HBM	66 Neutral	C$3.95B	35.89	3.30%	0.20%	19.70%	9.24%
LUN	64 Neutral	$10.25B	25.63	0.24%	3.13%	-2.71%	-188.94%
FM	63 Neutral	$16.93B	―	0.02%	―	-24.38%	99.06%
OR	56 Neutral	$5.51B	247.32	1.33%	0.89%	1.62%	-232.31%
Sector *	47 Neutral	$2.64B	-3.21	-21.68%	3.30%	4.19%	-30.23%
RIO	40 Underperform	C$356.60M	―	0.21%	―	―	-92.22%

Labrador Iron Ore Corporate Events

Labrador Iron Ore Reports Mixed Financial Results Amid Market Challenges

In 2024, LIORC reported a 4% increase in revenue to $209 million, despite a 6% decrease in net income per share due to lower equity earnings and a non-cash write-down. Cash flow from operations per share rose by 32%, driven by increased dividends from IOC. The global iron ore market faced challenges with lower prices and reduced demand, particularly in China, impacting the company’s financial performance.

Labrador Iron Ore Declares $0.50 Q1 Dividend

Labrador Iron Ore Royalty Corporation announced a quarterly cash dividend of $0.50 per common share, payable on April 30, 2025, to shareholders of record as of March 31, 2025. This dividend declaration reflects the company’s ongoing commitment to returning value to its shareholders, highlighting its stable financial position and the continued profitability of its operations in the iron ore market.

Labrador Iron Ore Sees Revenue Prospects with IOC’s Production and Sales Report

Rio Tinto released its quarterly operational report for the fourth quarter of 2024, highlighting IOC’s production and sales figures. IOC reported a total saleable iron ore production of 4.31 million tonnes and total sales of 4.25 million tonnes for the period. The report also outlined IOC’s production guidance for 2025, setting a target of 16.5 to 19.4 million tonnes. These figures are significant for Labrador Iron Ore Royalty Corporation, which benefits from royalties on IOC’s production and sales, indicating potential revenue implications for the corporation.