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Smurfit Kappa Group Plc (SK3.I) Stock Fundamental Analysis

DUB:SK3 - Euronext Dublin - IE00B1RR8406 - Common Stock - Currency: EUR

41.44  -0.16 (-0.38%)

Fundamental Rating

5

SK3 gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 12 industry peers in the Containers & Packaging industry. SK3 has only an average score on both its financial health and profitability. SK3 is valued correctly, but it does not seem to be growing. Finally SK3 also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

In the past year SK3 was profitable.
SK3 had a positive operating cash flow in the past year.
In the past 5 years SK3 has always been profitable.
Each year in the past 5 years SK3 had a positive operating cash flow.
SK3.I Yearly Net Income VS EBIT VS OCF VS FCFSK3.I Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M 1B 1.5B

1.2 Ratios

The Return On Assets of SK3 (6.00%) is comparable to the rest of the industry.
SK3's Return On Equity of 13.63% is fine compared to the rest of the industry. SK3 outperforms 66.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.36%, SK3 is in the better half of the industry, outperforming 73.33% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SK3 is above the industry average of 7.85%.
Industry RankSector Rank
ROA 6%
ROE 13.63%
ROIC 12.36%
ROA(3y)6.46%
ROA(5y)5.89%
ROE(3y)15.98%
ROE(5y)15.7%
ROIC(3y)12.82%
ROIC(5y)12.1%
SK3.I Yearly ROA, ROE, ROICSK3.I Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 -20

1.3 Margins

SK3 has a Profit Margin (6.72%) which is in line with its industry peers.
In the last couple of years the Profit Margin of SK3 has grown nicely.
The Operating Margin of SK3 (12.45%) is better than 66.67% of its industry peers.
In the last couple of years the Operating Margin of SK3 has remained more or less at the same level.
With a Gross Margin value of 33.60%, SK3 is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
SK3's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 12.45%
PM (TTM) 6.72%
GM 33.6%
OM growth 3Y4.99%
OM growth 5Y0.25%
PM growth 3Y1.72%
PM growth 5YN/A
GM growth 3Y-0.1%
GM growth 5Y0.33%
SK3.I Yearly Profit, Operating, Gross MarginsSK3.I Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 20 30

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4

2. Health

2.1 Basic Checks

SK3 has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
SK3 has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SK3 has more shares outstanding
Compared to 1 year ago, SK3 has an improved debt to assets ratio.
SK3.I Yearly Shares OutstandingSK3.I Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
SK3.I Yearly Total Debt VS Total AssetsSK3.I Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

2.2 Solvency

An Altman-Z score of 2.70 indicates that SK3 is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of SK3 (2.70) is comparable to the rest of the industry.
SK3 has a debt to FCF ratio of 5.69. This is a neutral value as SK3 would need 5.69 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.69, SK3 perfoms like the industry average, outperforming 53.33% of the companies in the same industry.
SK3 has a Debt/Equity ratio of 0.64. This is a neutral value indicating SK3 is somewhat dependend on debt financing.
SK3 has a Debt to Equity ratio of 0.64. This is comparable to the rest of the industry: SK3 outperforms 46.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.64
Debt/FCF 5.69
Altman-Z 2.7
ROIC/WACC1.86
WACC6.65%
SK3.I Yearly LT Debt VS Equity VS FCFSK3.I Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

2.3 Liquidity

A Current Ratio of 1.51 indicates that SK3 should not have too much problems paying its short term obligations.
SK3 has a Current ratio of 1.51. This is comparable to the rest of the industry: SK3 outperforms 46.67% of its industry peers.
SK3 has a Quick Ratio of 1.14. This is a normal value and indicates that SK3 is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.14, SK3 is in the better half of the industry, outperforming 73.33% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.51
Quick Ratio 1.14
SK3.I Yearly Current Assets VS Current LiabilitesSK3.I Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

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3

3. Growth

3.1 Past

The earnings per share for SK3 have decreased strongly by -20.05% in the last year.
SK3 shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.84% yearly.
SK3 shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -12.04%.
The Revenue has been growing slightly by 4.73% on average over the past years.
EPS 1Y (TTM)-20.05%
EPS 3Y8.84%
EPS 5YN/A
EPS Q2Q%-24.66%
Revenue 1Y (TTM)-12.04%
Revenue growth 3Y9.74%
Revenue growth 5Y4.73%
Sales Q2Q%-15.47%

3.2 Future

The Earnings Per Share is expected to grow by 5.86% on average over the next years.
SK3 is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.65% yearly.
EPS Next Y-1.85%
EPS Next 2Y5.93%
EPS Next 3Y6.48%
EPS Next 5Y5.86%
Revenue Next Year-1.14%
Revenue Next 2Y1.64%
Revenue Next 3Y2.4%
Revenue Next 5Y3.65%

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.
SK3.I Yearly Revenue VS EstimatesSK3.I Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2B 4B 6B 8B 10B
SK3.I Yearly EPS VS EstimatesSK3.I Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 2 3 4

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4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 14.19 indicates a correct valuation of SK3.
Compared to the rest of the industry, the Price/Earnings ratio of SK3 is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 24.95, SK3 is valued a bit cheaper.
The Price/Forward Earnings ratio is 12.26, which indicates a correct valuation of SK3.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SK3 indicates a somewhat cheap valuation: SK3 is cheaper than 66.67% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.99. SK3 is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 14.19
Fwd PE 12.26
SK3.I Price Earnings VS Forward Price EarningsSK3.I Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20

4.2 Price Multiples

66.67% of the companies in the same industry are more expensive than SK3, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as SK3.
Industry RankSector Rank
P/FCF 16.44
EV/EBITDA 6.7
SK3.I Per share dataSK3.I EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

SK3 has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y5.93%
EPS Next 3Y6.48%

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7

5. Dividend

5.1 Amount

SK3 has a Yearly Dividend Yield of 4.50%, which is a nice return.
SK3's Dividend Yield is a higher than the industry average which is at 4.37.
SK3's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
Industry RankSector Rank
Dividend Yield 4.5%

5.2 History

On average, the dividend of SK3 grows each year by 9.48%, which is quite nice.
Dividend Growth(5Y)9.48%
Div Incr Years2
Div Non Decr Years2
SK3.I Yearly Dividends per shareSK3.I Yearly Dividends per shareYearly Dividends per share 2018 2019 2020 2021 2022 2023 2024 0.5 1 1.5

5.3 Sustainability

SK3 pays out 48.42% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of SK3 is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP48.42%
EPS Next 2Y5.93%
EPS Next 3Y6.48%
SK3.I Yearly Income VS Free CF VS DividendSK3.I Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M
SK3.I Dividend Payout.SK3.I Dividend Payout, showing the Payout Ratio.SK3.I Dividend Payout.PayoutRetained Earnings

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Smurfit Kappa Group Plc

DUB:SK3 (7/2/2024, 7:00:00 PM)

41.44

-0.16 (-0.38%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryContainers & Packaging
Earnings (Last)05-02 2024-05-02
Earnings (Next)07-31 2024-07-31
Inst OwnersN/A
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.82B
Analysts84.62
Price Target50.43 (21.69%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 4.5%
Yearly Dividend1.41
Dividend Growth(5Y)9.48%
DP48.42%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.91%
PT rev (3m)9.24%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)4.78%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.91%
Valuation
Industry RankSector Rank
PE 14.19
Fwd PE 12.26
P/S 0.96
P/FCF 16.44
P/OCF 7.13
P/B 1.95
P/tB 3.74
EV/EBITDA 6.7
EPS(TTM)2.92
EY7.05%
EPS(NY)3.38
Fwd EY8.16%
FCF(TTM)2.52
FCFY6.08%
OCF(TTM)5.81
OCFY14.02%
SpS43.17
BVpS21.3
TBVpS11.07
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 6%
ROE 13.63%
ROCE 14.12%
ROIC 12.36%
ROICexc 13.6%
ROICexgc 19.31%
OM 12.45%
PM (TTM) 6.72%
GM 33.6%
FCFM 5.84%
ROA(3y)6.46%
ROA(5y)5.89%
ROE(3y)15.98%
ROE(5y)15.7%
ROIC(3y)12.82%
ROIC(5y)12.1%
ROICexc(3y)14.78%
ROICexc(5y)13.59%
ROICexgc(3y)22.11%
ROICexgc(5y)20.55%
ROCE(3y)14.65%
ROCE(5y)13.83%
ROICexcg growth 3Y7.64%
ROICexcg growth 5Y-0.28%
ROICexc growth 3Y9.58%
ROICexc growth 5Y1.3%
OM growth 3Y4.99%
OM growth 5Y0.25%
PM growth 3Y1.72%
PM growth 5YN/A
GM growth 3Y-0.1%
GM growth 5Y0.33%
F-Score7
Asset Turnover0.89
Health
Industry RankSector Rank
Debt/Equity 0.64
Debt/FCF 5.69
Debt/EBITDA 1.75
Cap/Depr 135.28%
Cap/Sales 7.62%
Interest Coverage 7.88
Cash Conversion 74.44%
Profit Quality 86.81%
Current Ratio 1.51
Quick Ratio 1.14
Altman-Z 2.7
F-Score7
WACC6.65%
ROIC/WACC1.86
Cap/Depr(3y)129.25%
Cap/Depr(5y)119.37%
Cap/Sales(3y)6.88%
Cap/Sales(5y)6.73%
Profit Quality(3y)66.99%
Profit Quality(5y)89.41%
High Growth Momentum
Growth
EPS 1Y (TTM)-20.05%
EPS 3Y8.84%
EPS 5YN/A
EPS Q2Q%-24.66%
EPS Next Y-1.85%
EPS Next 2Y5.93%
EPS Next 3Y6.48%
EPS Next 5Y5.86%
Revenue 1Y (TTM)-12.04%
Revenue growth 3Y9.74%
Revenue growth 5Y4.73%
Sales Q2Q%-15.47%
Revenue Next Year-1.14%
Revenue Next 2Y1.64%
Revenue Next 3Y2.4%
Revenue Next 5Y3.65%
EBIT growth 1Y-15.99%
EBIT growth 3Y15.21%
EBIT growth 5Y5%
EBIT Next Year48.99%
EBIT Next 3Y18.99%
EBIT Next 5Y14.85%
FCF growth 1Y17.08%
FCF growth 3Y-3.53%
FCF growth 5Y6.51%
OCF growth 1Y4.48%
OCF growth 3Y6.75%
OCF growth 5Y7.99%