SMITH & NEPHEW PLC -SPON ADR (SNN) Stock Fundamental Analysis
NYSE:SNN - US83175M2052 - ADR
36.9 USD
-0.55 (-1.47%)
36.9 USD
0 (0%)
Overall SNN gets a fundamental rating of 6 out of 10. We evaluated SNN against 190 industry peers in the Health Care Equipment & Supplies industry. While SNN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SNN has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
SNN had positive earnings in the past year.
In the past year SNN had a positive cash flow from operations.
In the past 5 years SNN has always been profitable.
Each year in the past 5 years SNN had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.59%, SNN belongs to the top of the industry, outperforming 80.53% of the companies in the same industry.
With an excellent Return On Equity value of 8.87%, SNN belongs to the best of the industry, outperforming 82.63% of the companies in the same industry.
SNN has a better Return On Invested Capital (8.43%) than 87.37% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SNN is in line with the industry average of 8.46%.
The 3 year average ROIC (7.67%) for SNN is below the current ROIC(8.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 8.87% | ||
| ROIC | 8.43% |
ROA(3y)2.95%
ROA(5y)3.54%
ROE(3y)5.7%
ROE(5y)7%
ROIC(3y)7.67%
ROIC(5y)6.98%
1.3 Margins
With a decent Profit Margin value of 8.26%, SNN is doing good in the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Profit Margin of SNN has declined.
The Operating Margin of SNN (14.99%) is better than 85.26% of its industry peers.
SNN's Operating Margin has declined in the last couple of years.
SNN has a Gross Margin of 70.04%. This is in the better half of the industry: SNN outperforms 80.00% of its industry peers.
SNN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.99% | ||
| PM (TTM) | 8.26% | ||
| GM | 70.04% |
OM growth 3Y3.51%
OM growth 5Y-5.16%
PM growth 3Y-10.98%
PM growth 5Y-9.49%
GM growth 3Y-0.41%
GM growth 5Y-1.1%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SNN is still creating some value.
SNN has about the same amout of shares outstanding than it did 1 year ago.
SNN has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for SNN is higher compared to a year ago.
2.2 Solvency
SNN has an Altman-Z score of 3.70. This indicates that SNN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.70, SNN is in the better half of the industry, outperforming 73.16% of the companies in the same industry.
The Debt to FCF ratio of SNN is 4.33, which is a neutral value as it means it would take SNN, 4.33 years of fcf income to pay off all of its debts.
SNN's Debt to FCF ratio of 4.33 is amongst the best of the industry. SNN outperforms 82.11% of its industry peers.
A Debt/Equity ratio of 0.60 indicates that SNN is somewhat dependend on debt financing.
SNN's Debt to Equity ratio of 0.60 is on the low side compared to the rest of the industry. SNN is outperformed by 67.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 4.33 | ||
| Altman-Z | 3.7 |
ROIC/WACC1.01
WACC8.33%
2.3 Liquidity
A Current Ratio of 3.00 indicates that SNN has no problem at all paying its short term obligations.
SNN's Current ratio of 3.00 is in line compared to the rest of the industry. SNN outperforms 59.47% of its industry peers.
SNN has a Quick Ratio of 1.40. This is a normal value and indicates that SNN is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.40, SNN is not doing good in the industry: 62.11% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 59.86% over the past year.
Measured over the past years, SNN shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.22% on average per year.
The Revenue has been growing slightly by 5.35% in the past year.
Measured over the past years, SNN shows a small growth in Revenue. The Revenue has been growing by 2.49% on average per year.
EPS 1Y (TTM)59.86%
EPS 3Y-7.63%
EPS 5Y-7.22%
EPS Q2Q%35.92%
Revenue 1Y (TTM)5.35%
Revenue growth 3Y3.69%
Revenue growth 5Y2.49%
Sales Q2Q%4.74%
3.2 Future
SNN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.02% yearly.
Based on estimates for the next years, SNN will show a small growth in Revenue. The Revenue will grow by 5.53% on average per year.
EPS Next Y20.53%
EPS Next 2Y16.97%
EPS Next 3Y12.53%
EPS Next 5Y11.02%
Revenue Next Year6.28%
Revenue Next 2Y5.82%
Revenue Next 3Y5.54%
Revenue Next 5Y5.53%
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 accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 32.65, which means the current valuation is very expensive for SNN.
Based on the Price/Earnings ratio, SNN is valued a bit cheaper than the industry average as 73.16% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.90. SNN is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 14.72, the valuation of SNN can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SNN indicates a rather cheap valuation: SNN is cheaper than 85.26% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.52, SNN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.65 | ||
| Fwd PE | 14.72 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SNN is valued cheaper than 85.79% of the companies in the same industry.
87.37% of the companies in the same industry are more expensive than SNN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.17 | ||
| EV/EBITDA | 12.42 |
4.3 Compensation for Growth
SNN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SNN may justify a higher PE ratio.
SNN's earnings are expected to grow with 12.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.59
PEG (5Y)N/A
EPS Next 2Y16.97%
EPS Next 3Y12.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.05%, SNN has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.73, SNN pays a better dividend. On top of this SNN pays more dividend than 96.84% of the companies listed in the same industry.
SNN's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
5.2 History
The dividend of SNN has a limited annual growth rate of 0.55%.
SNN has paid a dividend for at least 10 years, which is a reliable track record.
SNN has decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.55%
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
66.60% of the earnings are spent on dividend by SNN. This is not a sustainable payout ratio.
The dividend of SNN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP66.6%
EPS Next 2Y16.97%
EPS Next 3Y12.53%
36.9
-0.55 (-1.47%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners67.14%
Inst Owner Change23.03%
Ins Owners0.12%
Ins Owner ChangeN/A
Market Cap16.08B
Analysts74.4
Price Target36.64 (-0.7%)
Short Float %0.65%
Short Ratio2.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.05% |
Yearly Dividend0.37
Dividend Growth(5Y)0.55%
DP66.6%
Div Incr Years1
Div Non Decr Years2
Ex-Date
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)7.47%
PT rev (3m)8.69%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)3.91%
EPS NY rev (3m)3.91%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.65 | ||
| Fwd PE | 14.72 | ||
| P/S | 2.7 | ||
| P/FCF | 20.17 | ||
| P/OCF | 14.04 | ||
| P/B | 2.9 | ||
| P/tB | 10.99 | ||
| EV/EBITDA | 12.42 |
EPS(TTM)1.13
EY3.06%
EPS(NY)2.51
Fwd EY6.79%
FCF(TTM)1.83
FCFY4.96%
OCF(TTM)2.63
OCFY7.12%
SpS13.64
BVpS12.71
TBVpS3.36
PEG (NY)1.59
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 8.87% | ||
| ROCE | 9.74% | ||
| ROIC | 8.43% | ||
| ROICexc | 9.1% | ||
| ROICexgc | 17.48% | ||
| OM | 14.99% | ||
| PM (TTM) | 8.26% | ||
| GM | 70.04% | ||
| FCFM | 13.41% |
ROA(3y)2.95%
ROA(5y)3.54%
ROE(3y)5.7%
ROE(5y)7%
ROIC(3y)7.67%
ROIC(5y)6.98%
ROICexc(3y)8.09%
ROICexc(5y)7.69%
ROICexgc(3y)16.87%
ROICexgc(5y)16.94%
ROCE(3y)8.97%
ROCE(5y)8.12%
ROICexcg growth 3Y-2.43%
ROICexcg growth 5Y-8.17%
ROICexc growth 3Y4.17%
ROICexc growth 5Y-4.59%
OM growth 3Y3.51%
OM growth 5Y-5.16%
PM growth 3Y-10.98%
PM growth 5Y-9.49%
GM growth 3Y-0.41%
GM growth 5Y-1.1%
F-Score8
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 4.33 | ||
| Debt/EBITDA | 2.16 | ||
| Cap/Depr | 53.95% | ||
| Cap/Sales | 5.85% | ||
| Interest Coverage | 5.94 | ||
| Cash Conversion | 74.54% | ||
| Profit Quality | 162.32% | ||
| Current Ratio | 3 | ||
| Quick Ratio | 1.4 | ||
| Altman-Z | 3.7 |
F-Score8
WACC8.33%
ROIC/WACC1.01
Cap/Depr(3y)59.87%
Cap/Depr(5y)66.08%
Cap/Sales(3y)7.04%
Cap/Sales(5y)7.73%
Profit Quality(3y)88.41%
Profit Quality(5y)92.91%
High Growth Momentum
Growth
EPS 1Y (TTM)59.86%
EPS 3Y-7.63%
EPS 5Y-7.22%
EPS Q2Q%35.92%
EPS Next Y20.53%
EPS Next 2Y16.97%
EPS Next 3Y12.53%
EPS Next 5Y11.02%
Revenue 1Y (TTM)5.35%
Revenue growth 3Y3.69%
Revenue growth 5Y2.49%
Sales Q2Q%4.74%
Revenue Next Year6.28%
Revenue Next 2Y5.82%
Revenue Next 3Y5.54%
Revenue Next 5Y5.53%
EBIT growth 1Y28.02%
EBIT growth 3Y7.32%
EBIT growth 5Y-2.8%
EBIT Next Year72.38%
EBIT Next 3Y25.75%
EBIT Next 5Y19.2%
FCF growth 1Y3522.73%
FCF growth 3Y8.92%
FCF growth 5Y-4.43%
OCF growth 1Y206.15%
OCF growth 3Y4.02%
OCF growth 5Y-3.31%