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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 14 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.
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

With a Return On Assets value of 6.00%, SK3 perfoms like the industry average, outperforming 53.33% of the companies in the same industry.
SK3 has a Return On Equity of 13.63%. This is in the better half of the industry: SK3 outperforms 66.67% of its industry peers.
With a decent Return On Invested Capital value of 12.36%, SK3 is doing good in the industry, outperforming 73.33% of the companies in the same industry.
SK3 had an Average Return On Invested Capital over the past 3 years of 12.82%. This is significantly above the industry average of 6.59%.
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.
SK3's Profit Margin has improved in the last couple of years.
SK3 has a Operating Margin of 12.45%. This is in the better half of the industry: SK3 outperforms 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.
Compared to 1 year ago, SK3 has more shares outstanding
SK3 has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SK3 has been reduced compared to a year ago.
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 (2.70) which is comparable to the rest of the industry.
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.
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 (0.64) which is in line with 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

SK3 has a Current Ratio of 1.51. This is a normal value and indicates that SK3 is financially healthy and should not expect problems in meeting its short term obligations.
SK3 has a Current ratio (1.51) which is comparable to the rest of the industry.
A Quick Ratio of 1.14 indicates that SK3 should not have too much problems paying its short term obligations.
The Quick ratio of SK3 (1.14) is better than 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%.
SK3 shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.84% yearly.
Looking at the last year, SK3 shows a very negative growth in Revenue. The Revenue has decreased by -12.04% in the last year.
Measured over the past years, SK3 shows a small growth in Revenue. The Revenue has been growing by 4.73% on average per year.
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

Based on estimates for the next years, SK3 will show a small growth in Earnings Per Share. The EPS will grow by 5.86% on average per year.
The Revenue is expected to grow by 3.65% on average over the next years.
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.
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

The Price/Earnings ratio is 14.19, which indicates a correct valuation of SK3.
The rest of the industry has a similar Price/Earnings ratio as SK3.
The average S&P500 Price/Earnings ratio is at 27.28. SK3 is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 12.26, SK3 is valued correctly.
Based on the Price/Forward Earnings ratio, SK3 is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
SK3's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
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 25

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.
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

With a Yearly Dividend Yield of 4.50%, SK3 is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.31, SK3 pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, SK3 pays a better dividend.
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.
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%