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Labrador Iron Ore (TSE:LIF)
TSX:LIF
Canadian Market

Labrador Iron Ore (LIF) AI Stock Analysis

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Labrador Iron Ore

(TSX:LIF)

Rating:78Outperform
Price Target:
Labrador Iron Ore's strong financial performance with zero debt and robust cash flow underpins a high overall score. The valuation is attractive with a low P/E ratio and high dividend yield, enhancing its appeal. Technical analysis suggests moderate market momentum. The recent dividend announcement supports the company's stable outlook.
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 (LIF) vs. iShares MSCI Canada ETF (EWC)

Labrador Iron Ore Business Overview & Revenue Model

Company DescriptionLabrador Iron Ore Royalty Corporation (LIF) is a Canadian company primarily engaged in the iron ore mining sector. It holds a 15.10% equity interest in Iron Ore Company of Canada (IOC), which operates a major iron ore mine in Labrador City, Newfoundland and Labrador. IOC is a leading North American producer and exporter of premium iron ore pellets and high-grade concentrate. LIF's primary business activities include managing its investment in IOC and collecting royalties and dividends from its holdings.
How the Company Makes MoneyLabrador Iron Ore Royalty Corporation makes money through two main revenue streams: royalties and equity dividends. Firstly, LIF earns royalty revenue from the Iron Ore Company of Canada, as it holds a royalty on iron ore sales generated by IOC. This royalty is a function of the volume of iron ore produced and sold, as well as the prevailing market prices for iron ore products. Secondly, LIF receives dividends from its 15.10% equity interest in IOC. These dividends are contingent on IOC's profitability and its board's decision to distribute profits. LIF's financial performance is thus closely tied to IOC's operational success, global iron ore prices, and demand for iron ore products. Significant factors contributing to LIF's earnings include IOC's production efficiency, market demand for iron ore, and the global economic climate impacting commodity prices.

Labrador Iron Ore Financial Statement Overview

Summary
Labrador Iron Ore demonstrates solid financial health with stable profitability and growth. The income statement shows stable gross margins and a slight decline in net profit margin. The balance sheet is robust with zero debt and strong equity backing. Cash flow metrics are strong with significant free cash flow growth.
Income Statement
78
Positive
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
85
Very Positive
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
80
Positive
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
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
186.98M207.51M200.17M232.32M279.47M201.93M
Gross Profit
165.55M166.34M194.15M179.76M217.73M155.71M
EBIT
140.58M157.02M191.09M21.48M214.99M146.40M
EBITDA
147.30M163.28M158.53M183.63M221.16M152.59M
Net Income Common Stockholders
137.13M175.04M186.31M265.45M379.77M227.19M
Balance SheetCash, Cash Equivalents and Short-Term Investments
13.19M42.30M13.19M39.90M82.91M106.09M
Total Assets
837.04M836.13M837.04M825.76M789.31M823.22M
Total Debt
0.000.000.000.000.000.00
Net Debt
-13.19M-42.30M-13.19M-39.90M-82.91M-106.09M
Total Liabilities
177.71M193.19M177.71M188.31M225.25M256.85M
Stockholders Equity
659.33M642.93M659.33M637.46M564.06M566.37M
Cash FlowFree Cash Flow
196.60M201.91M152.49M184.19M402.42M175.43M
Operating Cash Flow
196.60M201.91M152.49M184.19M402.42M175.43M
Investing Cash Flow
0.000.000.000.000.000.00
Financing Cash Flow
-192.00M-172.80M-179.20M-227.20M-425.60M-147.20M

Labrador Iron Ore Technical Analysis

Technical Analysis Sentiment
Positive
Last Price29.27
Price Trends
50DMA
28.60
Positive
100DMA
29.23
Positive
200DMA
29.10
Positive
Market Momentum
MACD
0.14
Negative
RSI
57.98
Neutral
STOCH
78.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LIF, the sentiment is Positive. The current price of 29.27 is above the 20-day moving average (MA) of 28.60, above the 50-day MA of 28.60, and above the 200-day MA of 29.10, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 57.98 is Neutral, neither overbought nor oversold. The STOCH value of 78.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:LIF.

Labrador Iron Ore Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSDPM
79
Outperform
C$3.75B12.6519.71%1.01%10.57%24.23%
TSLIF
78
Outperform
C$1.88B13.7220.74%10.42%3.67%-6.05%
TSAFM
76
Outperform
C$1.16B8.0629.84%10.46%76.60%107.92%
TSADN
75
Outperform
C$328.25M16.555.85%6.36%12.30%-36.60%
51
Neutral
$2.02B-1.12-21.36%3.65%2.87%-30.54%
49
Neutral
C$759.72M-12.92%3.71%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:LIF
Labrador Iron Ore
29.25
2.69
10.13%
TSE:AFM
Alphamin Resources
0.85
-0.19
-18.27%
TSE:DPM
Dundee Precious Mtl
21.96
10.95
99.46%
TSE:ADN
Acadian Timber
18.25
1.79
10.87%
TSE:ASTL
Algoma Steel Group
7.25
-2.81
-27.95%

Labrador Iron Ore Corporate Events

Business Operations and StrategyFinancial Disclosures
Rio Tinto Reports Stable IOC Production and Sales for Q1 2025
Neutral
Apr 16, 2025

Rio Tinto has released its quarterly operational report for the first quarter of 2025, detailing the Iron Ore Company of Canada’s (IOC) production and sales figures. IOC reported a total saleable iron ore production of 3.95 million tonnes and total sales of 3.41 million tonnes for the quarter. The production guidance for 2025 remains unchanged at 16.5 to 19.4 million tonnes. This announcement provides stability in production expectations, which is crucial for stakeholders, including Labrador Iron Ore Royalty Corporation, which benefits from royalties on IOC’s output.

Spark’s Take on TSE:LIF Stock

According to Spark, TipRanks’ AI Analyst, TSE:LIF is a Outperform.

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.

To see Spark’s full report on TSE:LIF stock, click here.

Financial Disclosures
Labrador Iron Ore Reports Mixed Financial Results Amid Market Challenges
Neutral
Mar 11, 2025

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.

Dividends
Labrador Iron Ore Declares $0.50 Q1 Dividend
Positive
Mar 11, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.