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1. Company Snapshot

1.a. Company Description

Parkland Corporation operates food and convenience stores in Canada, the United States, the Caribbean region, and Central and South America.The company operates through four segments: Canada, USA, Supply, and International.The Canada segment owns, operates, supports, and distributes a coast-to-coast network of retail convenience, food, and fuel sites, as well as commercial cardlocks and bulk fuel facilities; and provides propane, heating oil, lubricants, and other related services to commercial, industrial, and residential customers.


It operates 1,812 retail gas stations under the Ultramar, Esso, Fas Gas Plus, Chevron, and Pioneer brands; and a convenience store under the On the Run brand.This segment also delivers bulk fuel, bulk and cylinder exchange propane, heating oil, lubricants, and other related products and services to customers in oil and gas, construction, mining, forestry, fishing, and transportation industries under the Ultramar, Bluewave Energy, Pipeline Commercial, Chevron, Columbia Fuels, and Sparlings Propane brands.The International segment operates retail service stations under the Esso, Shell, and Sol brands; and delivers and supplies gasoline, diesel, fuel oil, propane, and lubricants.


This segment also provides commercial solar and other renewable energy solutions.The USA segment operates a network of gas stations; and delivers bulk fuel, lubricants, and other related products and services under the Rhinehart Oil, Farstad Oil, Conrad & Bischoff, Tropic Oil and NFN National Fuel Network brands.The Supply segment manufactures transportation fuels; transports, stores, and markets fuels, crude oil, and liquid petroleum gases; and manufactures and sells aviation fuel to airlines.


The company was formerly known as Parkland Fuel Corporation and changed its name to Parkland Corporation in May 2020.Parkland Corporation was founded in 1977 and is headquartered in Calgary, Canada.

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1.b. Last Insights on PKI

Parkland Corporation's recent performance was driven by several positive factors. The company strengthened its Board with the appointment of two independent directors, Felipe Bayon and Sue Gove, on March 18, 2025. This move reinforces Parkland's commitment to strong corporate governance. Additionally, Parkland reaffirmed its Board's capability to lead the Strategic Review process, demonstrating its refreshed, experienced, and independent leadership. The company also announced the appointment of new management and business updates, which may have contributed to its recent performance.

1.c. Company Highlights

2. Financial Performance: Parkland Q4 2024 Earnings Review

Parkland's Q4 2024 earnings reflect a mixed performance, driven by both operational resilience and macroeconomic headwinds. The company reported adjusted EBITDA of $428 million, down slightly year-over-year, as the U.S. segment faced market share losses and refining margin challenges. Despite these headwinds, the Canadian and International segments demonstrated strong growth, with the International segment up 9% year-over-year. Parkland generated $556 million in cash flow, underscoring its ability to navigate challenging conditions while maintaining disciplined capital allocation. The company's leverage rose to 3.6x, reflecting the impact of lower refining margins and currency fluctuations, though management remains committed to returning to its 2x-3x leverage target.

Publication Date: Mar -14

📋 Highlights
  • Strategic Review and Value Creation: - Parkland is conducting a strategic review to explore value creation opportunities, including potential divestitures, mergers, or a sale, amid underperformance. This reflects their proactive approach to addressing challenges and unlocking shareholder value.
  • Financial Performance and Segment Dynamics: - Q4 2024 saw adjusted EBITDA of $428M, slightly down from 2023, with strong performance in Canada and International segments (+9% growth). The U.S. segment faced headwinds, including market share losses and refining margin challenges due to industry conditions.
  • Cash Flow and Leverage Update: - Parkland generated $556M in cash flow, supporting growth initiatives and dividends. However, leverage rose to 3.6x due to lower refining margins and currency effects, with plans to return to a target leverage range of 2x-3x.
  • Burnaby Refinery Optimization: - The Burnaby refinery is a key asset due to its integrated nature, favorable crude pricing, and high capture rates. The refinery's performance has been positively impacted by reduced exports, though challenges persist in the U.S. market.
  • International Growth and Future Outlook: - The International segment showed promising growth, particularly in Guyana and Suriname, driven by oil discoveries and economic expansion. Parkland remains optimistic about long-term recovery in the U.S. and resilience in navigating macroeconomic and political challenges.

Strategic Review and Growth Initiatives

CEO Bob Espey highlighted Parkland's strategic review, aimed at unlocking value through potential divestitures, mergers, or a sale. This initiative reflects the company's recognition of underperformance in certain segments, particularly the U.S. market. Despite these challenges, Parkland has made progress in growth initiatives, including the JOURNIE Rewards program, which now boasts over 6 million members. The company has also achieved $50 million in cost reductions, demonstrating its focus on efficiency. The Burnaby refinery, a standout asset, continues to benefit from favorable crude pricing and reduced exports, contributing to strong capture rates and operational resilience. However, the U.S. market remains a concern, with ongoing struggles in market share and supply chain management.

Valuation and Market Outlook

From a valuation perspective, Parkland's metrics suggest a stock that is pricing in both near-term challenges and long-term recovery potential. With an EV/EBITDA of 9.57 and a P/E ratio of 49.21, the stock reflects investor optimism about the company's ability to execute its strategic review and unlock value. The dividend yield of 3.9% also provides downside protection, while the free cash flow yield of 13.78% underscores the company's ability to generate returns through buybacks and dividends. Parkland's focus on disciplined capital allocation and balance sheet management remains critical as it navigates macroeconomic and political uncertainties.

Risks and Opportunities

Looking ahead, Parkland faces significant risks, including the uncertain outcome of its strategic review and ongoing challenges in the U.S. market. However, the company's diversified portfolio, particularly its strong performance in Canada and the International segment, provides a foundation for future growth. Management's emphasis on optimizing the Burnaby refinery and leveraging its integrated nature could unlock additional value, while the "Buy Canada" trend presents an opportunity to strengthen inventory management and market positioning. As Parkland works to return to its leverage target and explore strategic alternatives, investors will closely monitor progress on these fronts.

3. NewsRoom

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Parkland Corporation Announces Completion of Acquisition by Sunoco LP

Nov -03

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Parkland (TSX:PKI): Exploring Valuation After Recent Gains and Ongoing Strategic Review

Oct -28

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Parkland (TSX:PKI) One-Off $148 Million Loss Raises Fresh Doubts on Margin Growth Narrative

Oct -28

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Parkland Q3 Adjusted Earnings Rise 70% Ahead of its US$9.1-Billion Sale to Sunoco

Oct -27

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Parkland Reports 2025 Third Quarter Results and Provides Update on the Sunoco Transaction

Oct -27

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Sunoco LP Announces Expected Closing Date for Acquisition of Parkland Corporation and NYSE Listing Information for SunocoCorp LLC ("SUNC")

Oct -27

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Parkland Corporation and Sunoco LP Receive Investment Canada Act Approval

Oct -14

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Sunoco LP and Parkland Corporation Receive Investment Canada Act Approval

Oct -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.50%)

6. Segments

Canada

Expected Growth: 0.6%

The Canadian segment is expected to grow slightly above the global average due to its diversified business model and the potential for strategic expansions in the retail and commercial fuels sectors. The convenience store component adds a stable revenue stream.

Refining

Expected Growth: 0.4%

The Refining segment is expected to grow slightly below the global average due to the challenges posed by fluctuating crude oil prices and refining margins. However, its critical role in supplying other segments and external customers provides a relatively stable demand.

International

Expected Growth: 0.7%

The International segment is expected to grow above the global average due to the increasing demand for energy in the regions it operates. Opportunities for expansion into new markets and the growth of existing operations drive this expectation.

USA

Expected Growth: 0.6%

The USA segment is expected to grow in line with the Canada segment, slightly above the global average, driven by the potential for strategic acquisitions and the optimization of existing operations in a competitive market.

Corporate

Expected Growth: 0.5%

The Corporate segment's growth is expected to align with the global average as it scales with the overall activity level of the company, supporting the operating segments without significant deviation from the global growth hypothesis.

Intersegment Eliminations

Expected Growth: 0.5%

The Intersegment Eliminations are expected to grow in line with the global average, reflecting the overall activity and inter-segment transactions within the company, without being a driver of revenue growth.

7. Detailed Products

Fuel and Petroleum Products

Parkland Corporation supplies a wide range of fuel and petroleum products, including gasoline, diesel, jet fuel, and lubricants, to customers across Canada and the United States.

Convenience Store Products

Parkland Corporation operates a network of convenience stores, offering a variety of food, beverages, and other convenience items to customers.

Commercial Fuels and Services

Parkland Corporation provides commercial fuels, lubricants, and related services to businesses, governments, and institutions.

Aviation Fuels and Services

Parkland Corporation supplies aviation fuels and provides related services to airports, airlines, and general aviation customers.

Heating and Cooling Products

Parkland Corporation offers a range of heating and cooling products, including heating oil, propane, and HVAC equipment, to residential and commercial customers.

8. Parkland Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Parkland Corporation operates in the energy industry, which has a moderate threat of substitutes. While there are alternative energy sources, they are not yet widely adopted, and Parkland's products remain in high demand.

Bargaining Power Of Customers

Parkland Corporation's customers have limited bargaining power due to the company's diverse customer base and lack of concentration. This reduces the risk of customers negotiating lower prices or demanding better services.

Bargaining Power Of Suppliers

Parkland Corporation's suppliers have some bargaining power due to the company's dependence on a few large suppliers. However, the company's size and scale of operations mitigate this risk to some extent.

Threat Of New Entrants

The threat of new entrants in the energy industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. This reduces the risk of new competitors entering the market and disrupting Parkland Corporation's operations.

Intensity Of Rivalry

The energy industry is highly competitive, with many established players competing for market share. Parkland Corporation faces intense rivalry from its competitors, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.65%
Debt Cost 5.97%
Equity Weight 33.35%
Equity Cost 10.77%
WACC 7.57%
Leverage 199.87%

11. Quality Control: Parkland Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Chord Energy

A-Score: 6.5/10

Value: 8.1

Growth: 8.1

Quality: 5.1

Yield: 10.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Parkland

A-Score: 6.3/10

Value: 6.6

Growth: 4.8

Quality: 3.4

Yield: 8.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
HF Sinclair

A-Score: 5.9/10

Value: 7.3

Growth: 4.1

Quality: 3.9

Yield: 7.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Sunoco

A-Score: 5.5/10

Value: 3.9

Growth: 4.0

Quality: 2.5

Yield: 10.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
PBF Energy

A-Score: 4.4/10

Value: 9.6

Growth: 1.8

Quality: 4.2

Yield: 5.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Valvoline

A-Score: 4.0/10

Value: 2.9

Growth: 4.9

Quality: 5.8

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.84$

Current Price

39.84$

Potential

-0.00%

Expected Cash-Flows