New Lifetime High Reached: Tim Hortons (THI)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Tim Hortons ( THI) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Tim Hortons as such a stock due to the following factors:

  • THI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.8 million.
  • THI has traded 245,835 shares today.
  • THI is trading at a new lifetime high.

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More details on THI:

Tim Hortons Inc. engages in the development and franchising of quick service restaurants primarily in Canada and the United States. The stock currently has a dividend yield of 1.7%. THI has a PE ratio of 22.5. Currently there are 4 analysts that rate Tim Hortons a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Tim Hortons has been 311,500 shares per day over the past 30 days. Tim Hortons has a market cap of $8.7 billion and is part of the services sector and leisure industry. The stock has a beta of 0.69 and a short float of 0.2% with 2.08 days to cover. Shares are up 17.4% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tim Hortons as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • THI's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 1.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Net operating cash flow has increased to $210.13 million or 40.10% when compared to the same quarter last year. In addition, TIM HORTONS INC has also vastly surpassed the industry average cash flow growth rate of -13.24%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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