ARB (ASX:ARB) - Share price, News & Analysis

Q: What is the Fair Price of ARB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ARB (A$28.69) is trading above our estimate of [[fair value]] (A$21.79)

ARB fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	3/6

ARB Stock Overview

ARB Corporation Limited engages in the design, manufacture, distribution, and sale of motor vehicle accessories and light metal engineering works.

Rewards

Earnings are forecast to grow 3.64% per year

Earnings grew by 8.1% over the past year

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 20.1%

Risk Analysis

High level of non-cash earnings

ARB Competitors

GUD Holdings

ASX:GUD

AU$1.1b

PWR Holdings

ASX:PWH

AU$915.7m

Schaffer

ASX:SFC

AU$237.3m

Adrad Holdings

ASX:AHL

AU$125.8m

Price History & Performance

Summary of all time highs, changes and price drops for ARB
Historical stock prices
Current Share Price	AU$28.69
52 Week High	AU$55.00
52 Week Low	AU$24.84
Beta	0.69
1 Month Change	-2.65%
3 Month Change	-5.87%
1 Year Change	-37.71%
3 Year Change	55.92%
5 Year Change	65.84%
Change since IPO	25,981.82%

Recent News & Updates

Oct 04

ARB Corporation Limited's (ASX:ARB) Intrinsic Value Is Potentially 18% Below Its Share Price

Does the October share price for ARB Corporation Limited ( ASX:ARB ) reflect what it's really worth? Today, we will...

Sep 03

ARB's (ASX:ARB) Dividend Is Being Reduced To A$0.32

ARB Corporation Limited ( ASX:ARB ) is reducing its dividend from last year's comparable payment to A$0.32 on the 21st...

Aug 09

If EPS Growth Is Important To You, ARB (ASX:ARB) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

	ARB	AU Auto Components	AU Market
7D	3.6%	-3.4%	-0.7%
1Y	-37.7%	-34.6%	-11.7%

Return vs Industry: ARB underperformed the Australian Auto Components industry which returned -34.6% over the past year.

Return vs Market: ARB underperformed the Australian Market which returned -11.7% over the past year.

Price Volatility

Is ARB's price volatile compared to industry and market?
ARB volatility
ARB Average Weekly Movement	5.8%
Auto Components Industry Average Movement	5.4%
Market Average Movement	9.4%
10% most volatile stocks in AU Market	16.5%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: ARB is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: ARB's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1975	n/a	Lachlan A. McCann	https://www.arb.com.au

ARB Corporation Limited engages in the design, manufacture, distribution, and sale of motor vehicle accessories and light metal engineering works. The company provides bull bars, side rails and steps, canopies, UTE lids and tub accessories, roof racks, cross bars and carriers, suspension systems, driving lights, air compressors and tire accessories, air lockers, winches, recovery equipment and points, under vehicle protection products, fuel tanks and storage, drawers and cargo solutions, slide kitchen, portable fridge freezers, tents, swags and awnings, camping and touring accessories, safari snorkels, dual battery and solar systems, interior protection, and general accessories, as well as rear protection, towing, and wheel carriers. It also offers LINX, a controller that declutters the dashboard and centralizes the command of vehicle accessories by replacing classic switches, gauges, and monitors with one sleek and smart driver interface; and UHF radios, GPS, and reversing cameras.

ARB Fundamentals Summary

How do ARB's earnings and revenue compare to its market cap?
ARB fundamental statistics
Market Cap	AU$2.35b
Earnings (TTM)	AU$122.01m
Revenue (TTM)	AU$697.14m

19.2x

P/E Ratio

3.4x

P/S Ratio

Is ARB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARB income statement (TTM)
Revenue	AU$697.14m
Cost of Revenue	AU$314.29m
Gross Profit	AU$382.85m
Other Expenses	AU$260.85m
Earnings	AU$122.01m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.49
Gross Margin	54.92%
Net Profit Margin	17.50%
Debt/Equity Ratio	0%

How did ARB perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

48%

Payout Ratio

Does ARB pay a reliable dividends?

See ARB dividend history and benchmarks

When do you need to buy ARB by to receive an upcoming dividend?
ARB dividend dates
Ex Dividend Date	Oct 06 2022
Dividend Pay Date	Oct 21 2022
Days until Ex dividend	1 day
Days until Dividend pay date	16 days

Does ARB pay a reliable dividends?

See ARB dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is ARB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ARB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ARB. This is calculated by dividing ARB's market cap by their current preferred multiple.
What is ARB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$2.35b

ARB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.3x
Enterprise Value/EBITDA	12.8x
PEG Ratio	5.3x

Price to Earnings Ratio vs Peers

How does ARB's PE Ratio compare to its peers?

ARB PE Ratio vs Peers

The above table shows the PE ratio for ARB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30.1x
GUD GUD Holdings	39.9x	34.8%	AU$1.1b
PWH PWR Holdings	43.9x	14.7%	AU$915.7m
SFC Schaffer	9.1x	n/a	AU$237.3m
AHL Adrad Holdings	30.6x	n/a	AU$125.8m
ARB ARB	19.2x	3.6%	AU$2.3b

Price-To-Earnings vs Peers: ARB is good value based on its Price-To-Earnings Ratio (19.2x) compared to the peer average (30.1x).

Price to Earnings Ratio vs Industry

How does ARB's PE Ratio compare vs other companies in the Global Auto Components Industry?

Price-To-Earnings vs Industry: ARB is good value based on its Price-To-Earnings Ratio (19.2x) compared to the Global Auto Components industry average (19.7x)

Price to Earnings Ratio vs Fair Ratio

What is ARB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ARB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	19.2x
Fair PE Ratio	27.4x

Price-To-Earnings vs Fair Ratio: ARB is good value based on its Price-To-Earnings Ratio (19.2x) compared to the estimated Fair Price-To-Earnings Ratio (27.4x).

Share Price vs Fair Value

What is the Fair Price of ARB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ARB (A$28.69) is trading above our estimate of fair value (A$21.79)

Significantly Below Fair Value: ARB is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is ARB forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARB's forecast earnings growth (3.6% per year) is above the savings rate (1.8%).

Earnings vs Market: ARB's earnings (3.6% per year) are forecast to grow slower than the Australian market (6.4% per year).

High Growth Earnings: ARB's earnings are forecast to grow, but not significantly.

Revenue vs Market: ARB's revenue (8% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: ARB's revenue (8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ARB's Return on Equity is forecast to be low in 3 years time (18.5%).

Discover growth companies

Past Performance

How has ARB performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

23.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ARB has a high level of non-cash earnings.

Growing Profit Margin: ARB's current net profit margins (17.5%) are lower than last year (18%).

Past Earnings Growth Analysis

Earnings Trend: ARB's earnings have grown significantly by 23.1% per year over the past 5 years.

Accelerating Growth: ARB's earnings growth over the past year (8.1%) is below its 5-year average (23.1% per year).

Earnings vs Industry: ARB earnings growth over the past year (8.1%) exceeded the Auto Components industry 6%.

Return on Equity

High ROE: ARB's Return on Equity (22%) is considered high.

Discover strong past performing companies

Financial Health

How is ARB's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ARB's short term assets (A$359.1M) exceed its short term liabilities (A$99.4M).

Long Term Liabilities: ARB's short term assets (A$359.1M) exceed its long term liabilities (A$49.4M).

Debt to Equity History and Analysis

Debt Level: ARB is debt free.

Reducing Debt: ARB has no debt compared to 5 years ago when its debt to equity ratio was 0.02%.

Debt Coverage: ARB has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ARB has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is ARB current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.47%

Current Dividend Yield

Dividend Yield vs Market

ARB Dividend Yield vs Market

How does ARB dividend yield compare to the market?
Segment	Dividend Yield
Company (ARB)	2.5%
Market Bottom 25% (AU)	2.8%
Market Top 25% (AU)	7.2%
Industry Average (Auto Components)	2.5%
Analyst forecast in 3 Years (ARB)	2.7%

Notable Dividend: ARB's dividend (2.47%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.8%).

High Dividend: ARB's dividend (2.47%) is low compared to the top 25% of dividend payers in the Australian market (7.21%).

Stability and Growth of Payments

Stable Dividend: ARB's dividends per share have been stable in the past 10 years.

Growing Dividend: ARB's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (47.5%), ARB's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (261%), ARB's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

10.3yrs

Average management tenure

CEO

Lachlan A. McCann

13.67yrs

Tenure

AU$160,233

Compensation

Mr. Lachlan A. M. McCann has been Business Development Manager at ARB Corporation Limited since 2012 and serves as its Chief Executive Officer since July 05, 2022. He served as the Managing Director of Off...

Leadership Team

Experienced Management: ARB's management team is seasoned and experienced (10.3 years average tenure).

Board Members

Experienced Board: ARB's board of directors are seasoned and experienced ( 16.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

ASX:ARB Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
27 Jun 22	BuyAU$58,974	Andrew Stott	Individual	2,000	AU$29.49
20 Jun 22	BuyAU$37,568,140	Bennelong Australian Equity Partners Pty Ltd	Company	937,074	AU$40.09
26 Apr 22	BuyAU$41,931,239	Bennelong Australian Equity Partners Pty Ltd	Company	924,777	AU$45.34
04 Mar 22	BuyAU$20,122	Adrian Fitzpatrick	Individual	500	AU$40.24
04 Nov 21	SellAU$49,500,000	Roger Brown	Individual	1,000,000	AU$49.50

Ownership Breakdown

What is the ownership structure of ARB?
Owner Type	Number of Shares	Ownership Percentage
Private Companies	1,514,812	1.9%
Individual Insiders	6,287,794	7.7%
Institutions	27,972,566	34.2%
General Public	46,080,617	56.3%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 42.63% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
14.72%	Bennelong Australian Equity Partners Pty Ltd	12,051,110	A$345.7m	0%	14.97%
5.95%	Roger Brown	4,871,122	A$139.8m	-1.03%	no data
4.56%	The Vanguard Group, Inc.	3,735,881	A$107.2m	5.03%	no data
4.24%	Australian Foundation Investment Company Limited	3,472,544	A$99.6m	4.86%	1.35%
1.46%	BlackRock, Inc.	1,194,473	A$34.3m	-2.95%	no data
1.39%	Formax Pty Ltd	1,136,723	A$32.6m	-29.32%	no data
1.24%	Dimensional Fund Advisors LP	1,011,322	A$29.0m	1.31%	no data
1.16%	Norges Bank Investment Management	951,719	A$27.3m	0%	no data
1.16%	BKI Investment Company Limited	945,447	A$27.1m	-9.25%	2.25%
1.11%	Milton Corporation Limited	911,065	A$26.1m	0%	1.63%
1.11%	Netwealth Investments Ltd.	906,973	A$26.0m	-10.85%	0.34%
0.8%	Mirrabooka Investments Limited	652,611	A$18.7m	-6.87%	4.03%
0.5%	Gerard Van Paasen	410,000	A$11.8m	1.03%	no data
0.43%	Illabarook Proprietary Limited	350,000	A$10.0m	0%	no data
0.41%	Djerriwarrh Investments Limited	335,091	A$9.6m	0.03%	1.22%
0.4%	Gillian Carpenter	326,916	A$9.4m	0%	no data
0.4%	Judith Carpenter	326,916	A$9.4m	0%	no data
0.34%	State Street Global Advisors, Inc.	274,838	A$7.9m	1.61%	no data
0.24%	McInroy & Wood Limited	197,719	A$5.7m	0%	0.32%
0.23%	BetaShares Capital Limited	184,966	A$5.3m	5.18%	0.04%
0.2%	Charles Schwab Investment Management, Inc.	162,404	A$4.7m	1.9%	no data
0.17%	Malcolm Shore	136,468	A$3.9m	0%	no data
0.17%	Philip Alan Naylor	136,468	A$3.9m	0%	no data
0.14%	WisdomTree Asset Management, Inc.	117,744	A$3.4m	7.62%	0.02%
0.11%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	92,958	A$2.7m	0.29%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
ARB	ASX (Australian Securities Exchange)	Yes	Ordinary Shares	AU	AUD	Jan 1992
ARBF.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jan 1992
ARB	CHIA (Chi-X Australia)	Yes	Ordinary Shares	AU	AUD	Jan 1992

Data	Last Updated (UTC time)
Company Analysis	2022/10/04 00:00
End of Day Share Price	2022/10/04 00:00
Earnings	2022/06/30
Annual Earnings	2022/06/30