Labrador Iron (TSX:LIF): A High-Dividend Yielding Midcap Metal Stock

Summary

  • The Toronto-based metal company’s stock has soared 64 per cent in one year, led by the robust iron ore prices.
  • Labrador Iron Ore’s current dividend yield is almost 22 per cent.
  • The metal company reported debt-free earnings in the third quarter of 2020.

Iron and steel companies have been doing well on the back of robust prices of iron ore in the past few months. Iron ore price has zoomed nearly 80 per cent in one year.

As the metal price rallied, Toronto Stock Exchange (TSX)-listed Labrador Iron Ore stock emerged as an investors’ favourite in recent times. The Canadian basic material stock has advanced over 64 per cent in a year and offers double-digit dividend yield.

Without wasting any more time, let us look at this metal stock’s market fundamentals:

 

Labrador Iron Ore Royalty Corporation (TSX: LIF)

The Canadian corporation with a market cap of C$ 2.096 billion invests in the equity of Iron Ore Company of Canada (IOC), from which it generates revenues. IOC produced 4.2 million tonnes of iron ore in the third quarter of 2020.

Labrador distributes a quarterly dividend of C$ 1.8 per share, a 640 per cent rise, as compared to C$ 0.25 per stock dividend in the previous quarter. Its current dividend yield is 21.978 per cent, as per data on the TMX site. Its five-year average dividend growth stands at 7.65 per cent.

The shares hold a 34.41 per cent return on equity, with a price-to-earnings ratio of 10.70, TMX data adds. The iron stock offers 25.92 per cent return on assets and a price-to-cashflow of 15.50.

The mid cap metal scrips deliver earnings per share of C$ 3.13.

Image Source: Kalkine Group @2020

In the third quarter of 2020, Labrador Iron posted revenue of C$ 52.4 million, a surge of 15 per cent year-over-year (YoY) from C$ 45.5 million for Q3 of 2019. The company generated a net income of C$ 57.7 million for the third quarter of 2020, as against C$ 57.5 for Q3 in 2019. It reported a debt-free balance sheet and working capital of US$ 29.8 million as of September 30, 2020.


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