LPL FINANCIAL HOLDINGS INC (LPLA)
US50212V1008 - Common Stock
We assign a fundamental rating of 6 out of 10 to LPLA. LPLA was compared to 210 industry peers in the Capital Markets industry. While LPLA belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. LPLA has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year LPLA was profitable.
In the past year LPLA had a positive cash flow from operations.
LPLA had positive earnings in each of the past 5 years.
In the past 5 years LPLA always reported a positive cash flow from operatings.
1.2 Ratios
LPLA has a better Return On Assets (10.27%) than 87.98% of its industry peers.
Looking at the Return On Equity, with a value of 51.29%, LPLA belongs to the top of the industry, outperforming 98.08% of the companies in the same industry.
With an excellent Return On Invested Capital value of 17.37%, LPLA belongs to the best of the industry, outperforming 92.79% of the companies in the same industry.
LPLA had an Average Return On Invested Capital over the past 3 years of 14.97%. This is significantly above the industry average of 8.34%.
The last Return On Invested Capital (17.37%) for LPLA is above the 3 year average (14.97%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.27% | ||
| ROE | 51.29% | ||
| ROIC | 17.37% |
ROA(3y)8.31%
ROA(5y)8.33%
ROE(3y)39.28%
ROE(5y)41.69%
ROIC(3y)14.97%
ROIC(5y)14.71%
1.3 Margins
LPLA has a worse Profit Margin (10.61%) than 62.50% of its industry peers.
LPLA's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 16.44%, LPLA is doing worse than 64.42% of the companies in the same industry.
In the last couple of years the Operating Margin of LPLA has grown nicely.
Looking at the Gross Margin, with a value of 98.95%, LPLA belongs to the top of the industry, outperforming 98.56% of the companies in the same industry.
In the last couple of years the Gross Margin of LPLA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.44% | ||
| PM (TTM) | 10.61% | ||
| GM | 98.95% |
OM growth 3Y9.68%
OM growth 5Y3.52%
PM growth 3Y9.63%
PM growth 5Y4.6%
GM growth 3Y0.05%
GM growth 5Y0.03%
2. Health
2.1 Basic Checks
Compared to 1 year ago, LPLA has less shares outstanding
Compared to 5 years ago, LPLA has less shares outstanding
LPLA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.73 indicates that LPLA is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.73, LPLA belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
The Debt to FCF ratio of LPLA is 35.12, which is on the high side as it means it would take LPLA, 35.12 years of fcf income to pay off all of its debts.
LPLA has a Debt to FCF ratio (35.12) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.85 is on the high side and indicates that LPLA has dependencies on debt financing.
LPLA's Debt to Equity ratio of 1.85 is on the low side compared to the rest of the industry. LPLA is outperformed by 75.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | 35.12 | ||
| Altman-Z | 3.73 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 1.69 indicates that LPLA should not have too much problems paying its short term obligations.
LPLA's Current ratio of 1.69 is fine compared to the rest of the industry. LPLA outperforms 63.94% of its industry peers.
LPLA has a Quick Ratio of 1.69. This is a normal value and indicates that LPLA is financially healthy and should not expect problems in meeting its short term obligations.
LPLA's Quick ratio of 1.69 is fine compared to the rest of the industry. LPLA outperforms 64.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.69 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.99% over the past year.
Measured over the past years, LPLA shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.51% on average per year.
LPLA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.88%.
LPLA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.14% yearly.
EPS 1Y (TTM)35.99%
EPS 3Y34.46%
EPS 5Y24.51%
EPS growth Q2Q-16.63%
Revenue 1Y (TTM)16.88%
Revenue growth 3Y19.63%
Revenue growth 5Y14.14%
Revenue growth Q2Q13.31%
3.2 Future
The Earnings Per Share is expected to grow by 8.63% on average over the next years. This is quite good.
Based on estimates for the next years, LPLA will show a small growth in Revenue. The Revenue will grow by 6.88% on average per year.
EPS Next Y2.99%
EPS Next 2Y12.1%
EPS Next 3Y14.27%
EPS Next 5Y8.63%
Revenue Next Year14.88%
Revenue Next 2Y14.45%
Revenue Next 3Y13.12%
Revenue Next 5Y6.88%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
LPLA is valuated correctly with a Price/Earnings ratio of 16.93.
60.10% of the companies in the same industry are cheaper than LPLA, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.20, LPLA is valued a bit cheaper.
LPLA is valuated correctly with a Price/Forward Earnings ratio of 16.44.
LPLA's Price/Forward Earnings ratio is in line with the industry average.
LPLA is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.93 | ||
| Fwd PE | 16.44 |
4.2 Price Multiples
83.65% of the companies in the same industry are more expensive than LPLA, based on the Enterprise Value to EBITDA ratio.
LPLA's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. LPLA is more expensive than 64.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 181.36 | ||
| EV/EBITDA | 10.53 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
LPLA has an outstanding profitability rating, which may justify a higher PE ratio.
LPLA's earnings are expected to grow with 14.27% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.67
PEG (5Y)0.69
EPS Next 2Y12.1%
EPS Next 3Y14.27%
5. Dividend
5.1 Amount
With a yearly dividend of 0.46%, LPLA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 7.77, LPLA is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.44, LPLA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.46% |
5.2 History
The dividend of LPLA has a limited annual growth rate of 3.46%.
LPLA has paid a dividend for at least 10 years, which is a reliable track record.
LPLA has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.46%
Div Incr Years1
Div Non Decr Years10
5.3 Sustainability
8.65% of the earnings are spent on dividend by LPLA. This is a low number and sustainable payout ratio.
The dividend of LPLA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP8.65%
EPS Next 2Y12.1%
EPS Next 3Y14.27%
LPL FINANCIAL HOLDINGS INC
NASDAQ:LPLA (4/25/2024, 5:14:38 PM)
After market: 265.42 0 (0%)265.42
+0.88 (+0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.83B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.46% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.93 | ||
| Fwd PE | 16.44 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.67
PEG (5Y)0.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.27% | ||
| ROE | 51.29% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 16.44% | ||
| PM (TTM) | 10.61% | ||
| GM | 98.95% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.97
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.85 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.69 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)35.99%
EPS 3Y34.46%
EPS 5Y
EPS growth Q2Q
EPS Next Y2.99%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)16.88%
Revenue growth 3Y19.63%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
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