ASX:ARB

Stock Analysis Report

Executive Summary

ARB Corporation Limited designs, manufactures, distributes, and sells motor vehicle accessories and light metal engineering works in Australia, the United States, Thailand, the Middle East, and Europe.

Rewards

Earnings are forecast to grow 6.63% per year

Earnings grew by 12.1% over the past year

Pays a reliable dividend of 1.93%

Risk Analysis

No risks detected for ARB from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has ARB's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARB has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.5%

ARB

3.9%

AU Auto Components

1.4%

AU Market


1 Year Return

26.8%

ARB

18.7%

AU Auto Components

16.1%

AU Market

Return vs Industry: ARB exceeded the Australian Auto Components industry which returned 18.7% over the past year.

Return vs Market: ARB exceeded the Australian Market which returned 16.1% over the past year.


Shareholder returns

ARBIndustryMarket
7 Day8.5%3.9%1.4%
30 Day4.7%4.6%0.5%
90 Day5.0%6.4%4.8%
1 Year29.5%26.8%22.9%18.7%21.2%16.1%
3 Year38.5%30.2%49.0%36.2%37.0%18.6%
5 Year88.1%69.7%97.5%69.7%51.7%17.8%

Price Volatility Vs. Market

How volatile is ARB's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

28.47x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARB (A$20.46) is trading above our estimate of fair value (A$8.8)

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


Price To Earnings Ratio

PE vs Industry: ARB is poor value based on its PE Ratio (28.5x) compared to the Auto Components industry average (15.1x).

PE vs Market: ARB is poor value based on its PE Ratio (28.5x) compared to the Australian market (18.8x).


Price to Earnings Growth Ratio

PEG Ratio: ARB is poor value based on its PEG Ratio (4.3x)


Price to Book Ratio

PB vs Industry: ARB is good value based on its PB Ratio (4.7x) compared to the AU Auto Components industry average (5x).


Next Steps

Future Growth

How is ARB forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

6.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARB's forecast earnings growth (6.6% per year) is above the savings rate (1.1%).

Earnings vs Market: ARB's earnings (6.6% per year) are forecast to grow slower than the Australian market (9.6% per year).

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

Revenue vs Market: ARB's revenue (6.6% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: ARB's revenue (6.6% 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 (15.8%).


Next Steps

Past Performance

How has ARB performed over the past 5 years?

5.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARB has high quality earnings.

Growing Profit Margin: ARB's current net profit margins (12.8%) are higher than last year (12%).


Past Earnings Growth Analysis

Earnings Trend: ARB's earnings have grown by 5.5% per year over the past 5 years.

Accelerating Growth: ARB's earnings growth over the past year (12.1%) exceeds its 5-year average (5.5% per year).

Earnings vs Industry: ARB earnings growth over the past year (12.1%) exceeded the Auto Components industry -11.1%.


Return on Equity

High ROE: ARB's Return on Equity (16.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ARB's financial position?


Financial Position Analysis

Short Term Liabilities: ARB's short term assets (A$196.4M) exceed its short term liabilities (A$51.2M).

Long Term Liabilities: ARB's short term assets (A$196.4M) exceed its long term liabilities (A$1.3M).


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 0.06%.

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

Inventory Level: ARB has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ARB's debt is covered by short term assets.


Next Steps

Dividend

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

1.93%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%2.3%markettop25%5.5%industryaverage2.8%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: ARB's dividend (1.93%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: ARB's dividend (1.93%) is low compared to the top 25% of dividend payers in the Australian market (5.5%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55%), ARB's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARB's dividends in 3 years are forecast to be covered by earnings (56.7% payout ratio).


Next Steps

Management

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

9.0yrs

Average management tenure


CEO

Andrew Brown (61yo)

8.1yrs

Tenure

AU$407,847

Compensation

Mr. Andrew H. Brown has been the Managing Director of ARB Corporation Limited since 2012 and serves as its Director. Mr. Brown has Wide range of experience in automotive engineering and marketing. He had b ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD274.04K) is below average for companies of similar size in the Australian market ($USD931.92K).

Compensation vs Earnings: Andrew's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Brown
MD & Executive Director8.1yrsAU$407.85k0.022% A$366.6k
Damon Page
CFO & Company Secretary5.3yrsno datano data
Doug Pettis
President of Air Locker0yrsno datano data
Lachlan Mccann
Business Development Manager11yrsAU$160.23kno data
J. Messemaker
General Manager of Thule Car Rack Systems9.9yrsAU$51.67kno data

9.0yrs

Average Tenure

Experienced Management: ARB's management team is seasoned and experienced (9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Brown
MD & Executive Director8.1yrsAU$407.85k0.022% A$366.6k
Robert Fraser
Independent Non-Executive Director16yrsAU$94.68k0.036% A$585.7k
John Forsyth
Non Executive Director33.1yrsAU$224.67k0.013% A$219.9k
Roger Brown
Chairman33.1yrsAU$224.67k7.39% A$121.0m
Andrew Stott
Independent Non-Executive Director13.6yrsAU$64.42k0.0038% A$61.6k
Adrian Fitzpatrick
Independent Non-Executive Director3.6yrsAU$64.42k0.0031% A$51.2k
Karen Phin
Independent Director0.7yrsno datano data

16.0yrs

Average Tenure

62yo

Average Age

Experienced Board: ARB's board of directors are seasoned and experienced ( 16 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

Ownership Breakdown

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


Top Shareholders

Company Information

ARB Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ARB Corporation Limited
  • Ticker: ARB
  • Exchange: ASX
  • Founded: 1975
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: AU$1.637b
  • Shares outstanding: 79.83m
  • Website: https://www.arb.com.au

Location

  • ARB Corporation Limited
  • 42-44 Garden Street
  • Kilsyth
  • Victoria
  • 3137
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARBASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
ARBF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
ARBCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

ARB Corporation Limited designs, manufactures, distributes, and sells motor vehicle accessories and light metal engineering works in Australia, the United States, Thailand, the Middle East, and Europe. The company provides bull bars, side rails and side steps, canopies, UTE lids and tub accessories, roof racks and bars, suspension systems, driving lights, air compressors and tire accessories, air lockers, winches, recovery equipment, recovery points, under vehicle protection products, fuel tanks and storage, drawers and cargo solutions, portable fridge freezers, tents, swags and awnings, camping and touring accessories, safari snorkels, dual battery and solar systems,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. The company serves stockists, vehicle dealers, and various fleet operators. It operates approximately 66 ARB stores in Australia. ARB Corporation Limited was founded in 1975 and is based in Kilsyth, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 10:31
End of Day Share Price2020/02/17 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.