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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

Overall SK3 gets a fundamental rating of 5 out of 10. We evaluated SK3 against 13 industry peers in the Containers & Packaging industry. Both the profitability and the financial health of SK3 get a neutral evaluation. Nothing too spectacular is happening here. SK3 has a valuation in line with the averages, but it does not seem to be growing. SK3 also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

SK3 had positive earnings in the past year.
In the past year SK3 had a positive cash flow from operations.
In the past 5 years SK3 has always been profitable.
In the past 5 years SK3 always reported a positive cash flow from operatings.
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

SK3's Return On Assets of 6.00% is in line compared to the rest of the industry. SK3 outperforms 53.33% of its industry peers.
The Return On Equity of SK3 (13.63%) is better than 66.67% of its industry peers.
SK3's Return On Invested Capital of 12.36% is fine compared to the rest of the industry. SK3 outperforms 73.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SK3 is significantly above the industry average of 6.64%.
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

The Profit Margin of SK3 (6.72%) is comparable to the rest of the industry.
SK3's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 12.45%, SK3 is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
SK3's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 33.60%, SK3 is doing worse than 66.67% of the companies in the same industry.
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

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so SK3 is creating value.
The number of shares outstanding for SK3 has been increased compared to 1 year ago.
SK3 has more shares outstanding than it did 5 years ago.
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

SK3 has an Altman-Z score of 2.70. This is not the best score and indicates that SK3 is in the grey zone with still only limited risk for bankruptcy at the moment.
SK3 has a Altman-Z score of 2.70. This is comparable to the rest of the industry: SK3 outperforms 46.67% of its industry peers.
The Debt to FCF ratio of SK3 is 5.69, which is a neutral value as it means it would take SK3, 5.69 years of fcf income to pay off all of its debts.
SK3 has a Debt to FCF ratio (5.69) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.64 indicates that SK3 is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.64, SK3 is in line with its industry, outperforming 46.67% of the companies in the same industry.
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 (1.51) which is in line with 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.
SK3's Quick ratio of 1.14 is fine compared to the rest of the industry. SK3 outperforms 73.33% of its industry peers.
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

SK3 shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -20.05%.
Measured over the past years, SK3 shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.84% on average per year.
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

SK3 is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.86% yearly.
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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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

Based on the Price/Earnings ratio of 14.19, the valuation of SK3 can be described as correct.
The rest of the industry has a similar Price/Earnings ratio as SK3.
SK3 is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 12.26 indicates a correct valuation of SK3.
SK3's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SK3 is cheaper than 66.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.80. SK3 is valued rather cheaply 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 10 20 30

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SK3 indicates a somewhat cheap valuation: SK3 is cheaper than 66.67% of the companies listed in the same industry.
SK3's Price/Free Cash Flow ratio is in line with the industry average.
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.
Compared to an average industry Dividend Yield of 4.19, SK3 pays a bit more dividend than its industry peers.
SK3's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 4.5%

5.2 History

The dividend of SK3 is nicely growing with an annual growth rate of 9.48%!
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.
SK3's earnings are growing slower than its dividend. 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%