STERIS PLC (STE)
IE00BFY8C754 - Common Stock
We assign a fundamental rating of 6 out of 10 to STE. STE was compared to 195 industry peers in the Health Care Equipment & Supplies industry. While STE has a great profitability rating, there are some minor concerns on its financial health. STE is not valued too expensively and it also shows a decent growth rate. Finally STE also has an excellent dividend rating. These ratings could make STE a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
STE had positive earnings in the past year.
STE had a positive operating cash flow in the past year.
Each year in the past 5 years STE has been profitable.
In the past 5 years STE always reported a positive cash flow from operatings.
1.2 Ratios
STE has a Return On Assets of 4.96%. This is amongst the best in the industry. STE outperforms 83.59% of its industry peers.
STE has a better Return On Equity (8.84%) than 84.62% of its industry peers.
STE has a better Return On Invested Capital (5.82%) than 81.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for STE is below the industry average of 8.50%.
The 3 year average ROIC (5.06%) for STE is below the current ROIC(5.82%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.96% | ||
| ROE | 8.84% | ||
| ROIC | 5.82% |
ROA(3y)3.06%
ROA(5y)4.53%
ROE(3y)5.24%
ROE(5y)7.45%
ROIC(3y)5.06%
ROIC(5y)6.05%
1.3 Margins
Looking at the Profit Margin, with a value of 10.48%, STE belongs to the top of the industry, outperforming 85.64% of the companies in the same industry.
STE's Profit Margin has declined in the last couple of years.
The Operating Margin of STE (15.66%) is better than 87.18% of its industry peers.
In the last couple of years the Operating Margin of STE has remained more or less at the same level.
The Gross Margin of STE (43.60%) is worse than 60.00% of its industry peers.
In the last couple of years the Gross Margin of STE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.66% | ||
| PM (TTM) | 10.48% | ||
| GM | 43.6% |
OM growth 3Y-3.79%
OM growth 5Y0.62%
PM growth 3Y-45.66%
PM growth 5Y-27.93%
GM growth 3Y0.01%
GM growth 5Y0.87%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so STE is destroying value.
The number of shares outstanding for STE has been reduced compared to 1 year ago.
The number of shares outstanding for STE has been increased compared to 5 years ago.
Compared to 1 year ago, STE has a worse debt to assets ratio.
2.2 Solvency
STE has an Altman-Z score of 3.51. This indicates that STE is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.51, STE is doing good in the industry, outperforming 70.77% of the companies in the same industry.
The Debt to FCF ratio of STE is 5.57, which is a neutral value as it means it would take STE, 5.57 years of fcf income to pay off all of its debts.
STE has a Debt to FCF ratio of 5.57. This is amongst the best in the industry. STE outperforms 80.51% of its industry peers.
STE has a Debt/Equity ratio of 0.50. This is a neutral value indicating STE is somewhat dependend on debt financing.
STE's Debt to Equity ratio of 0.50 is on the low side compared to the rest of the industry. STE is outperformed by 65.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 5.57 | ||
| Altman-Z | 3.51 |
ROIC/WACC0.86
WACC6.77%
2.3 Liquidity
A Current Ratio of 2.43 indicates that STE has no problem at all paying its short term obligations.
STE has a worse Current ratio (2.43) than 64.10% of its industry peers.
STE has a Quick Ratio of 1.49. This is a normal value and indicates that STE is financially healthy and should not expect problems in meeting its short term obligations.
STE has a worse Quick ratio (1.49) than 70.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.43 | ||
| Quick Ratio | 1.49 |
3. Growth
3.1 Past
STE shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.55%.
The Earnings Per Share has been growing by 14.62% on average over the past years. This is quite good.
The Revenue has grown by 13.04% in the past year. This is quite good.
The Revenue has been growing by 13.61% on average over the past years. This is quite good.
EPS 1Y (TTM)7.55%
EPS 3Y13.33%
EPS 5Y14.62%
EPS growth Q2Q9.9%
Revenue 1Y (TTM)13.04%
Revenue growth 3Y17.83%
Revenue growth 5Y13.61%
Revenue growth Q2Q14.77%
3.2 Future
Based on estimates for the next years, STE will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.63% on average per year.
STE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.67% yearly.
EPS Next Y6.54%
EPS Next 2Y8.29%
EPS Next 3Y8.27%
EPS Next 5Y9.63%
Revenue Next Year12.81%
Revenue Next 2Y9.7%
Revenue Next 3Y8.44%
Revenue Next 5Y8.67%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.57, the valuation of STE can be described as rather expensive.
83.08% of the companies in the same industry are more expensive than STE, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.25. STE is around the same levels.
The Price/Forward Earnings ratio is 20.93, which indicates a rather expensive current valuation of STE.
Based on the Price/Forward Earnings ratio, STE is valued cheaper than 85.13% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.67. STE is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.57 | ||
| Fwd PE | 20.93 |
4.2 Price Multiples
STE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. STE is cheaper than 85.13% of the companies in the same industry.
STE's Price/Free Cash Flow ratio is rather cheap when compared to the industry. STE is cheaper than 84.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.53 | ||
| EV/EBITDA | 16.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of STE may justify a higher PE ratio.
PEG (NY)3.6
PEG (5Y)1.61
EPS Next 2Y8.29%
EPS Next 3Y8.27%
5. Dividend
5.1 Amount
STE has a Yearly Dividend Yield of 1.04%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.03, STE pays a better dividend. On top of this STE pays more dividend than 93.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, STE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
5.2 History
On average, the dividend of STE grows each year by 8.78%, which is quite nice.
STE has paid a dividend for at least 10 years, which is a reliable track record.
STE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.78%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
STE pays out 34.54% of its income as dividend. This is a sustainable payout ratio.
STE's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP34.54%
EPS Next 2Y8.29%
EPS Next 3Y8.27%
STERIS PLC
NYSE:STE (4/25/2024, 3:15:01 PM)
After market: 201.54 0 (0%)201.54
-1.26 (-0.62%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.91B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.04% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.57 | ||
| Fwd PE | 20.93 | ||
| 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)3.6
PEG (5Y)1.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.96% | ||
| ROE | 8.84% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.66% | ||
| PM (TTM) | 10.48% | ||
| GM | 43.6% | ||
| 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 Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.43 | ||
| Quick Ratio | 1.49 | ||
| 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)7.55%
EPS 3Y13.33%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.54%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13.04%
Revenue growth 3Y17.83%
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
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y