ASX:SFC

Stock Analysis Report

Executive Summary

Schaffer Corporation Limited, a diversified industrial company, manufactures and sells automotive leather and building materials primarily in Australia, Asia, and Europe.

Rewards

Trading at 22% below its fair value

Earnings have grown 43.2% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of -6.2% per year for the next 3 years

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet, undervalued and pays a dividend.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.3%

SFC

-0.1%

AU Auto Components

-0.07%

AU Market


1 Year Return

2.1%

SFC

12.0%

AU Auto Components

19.1%

AU Market

Return vs Industry: SFC underperformed the Australian Auto Components industry which returned 12% over the past year.

Return vs Market: SFC underperformed the Australian Market which returned 19.1% over the past year.


Shareholder returns

SFCIndustryMarket
7 Day0.3%-0.1%-0.07%
30 Day2.5%-1.5%-0.6%
90 Day-0.7%3.7%0.4%
1 Year7.2%2.1%16.1%12.0%25.0%19.1%
3 Year196.7%164.5%30.4%19.4%36.0%17.4%
5 Year232.5%169.4%93.6%65.9%63.2%26.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

22.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SFC (A$14.55) is trading below our estimate of fair value (A$18.65)

Significantly Below Fair Value: SFC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SFC is good value based on its PE Ratio (8.8x) compared to the Auto Components industry average (15.8x).

PE vs Market: SFC is good value based on its PE Ratio (8.8x) compared to the Australian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: SFC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SFC is good value based on its PB Ratio (1.9x) compared to the AU Auto Components industry average (4.3x).


Next Steps

Future Growth

How is Schaffer forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-6.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SFC's earnings are forecast to decline over the next 3 years (-6.2% per year).

Earnings vs Market: SFC's earnings are forecast to decline over the next 3 years (-6.2% per year).

High Growth Earnings: SFC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SFC's revenue is expected to decline over the next 3 years (-1% per year).

High Growth Revenue: SFC's revenue is forecast to decline over the next 3 years (-1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SFC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Schaffer performed over the past 5 years?

43.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SFC has high quality earnings.

Growing Profit Margin: SFC's current net profit margins (11.2%) are higher than last year (8.4%).


Past Earnings Growth Analysis

Earnings Trend: SFC's earnings have grown significantly by 43.2% per year over the past 5 years.

Accelerating Growth: SFC's earnings growth over the past year (20.2%) is below its 5-year average (43.2% per year).

Earnings vs Industry: SFC earnings growth over the past year (20.2%) underperformed the Auto Components industry 20.2%.


Return on Equity

High ROE: SFC's Return on Equity (23.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Schaffer's financial position?


Financial Position Analysis

Short Term Liabilities: SFC's short term assets (A$114.7M) exceed its short term liabilities (A$60.2M).

Long Term Liabilities: SFC's short term assets (A$114.7M) exceed its long term liabilities (A$32.0M).


Debt to Equity History and Analysis

Debt Level: SFC's debt to equity ratio (25.6%) is considered satisfactory.

Reducing Debt: SFC's debt to equity ratio has reduced from 68.7% to 25.6% over the past 5 years.

Debt Coverage: SFC's debt is well covered by operating cash flow (111.1%).

Interest Coverage: SFC's interest payments on its debt are well covered by EBIT (16.5x coverage).


Balance Sheet

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

Debt Coverage by Assets: SFC's debt is covered by short term assets (assets are 3.9x debt).


Next Steps

Dividend

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

5.50%

Current Dividend Yield


Dividend Yield vs Market

company5.5%marketbottom25%2.4%markettop25%5.5%industryaverage2.7%forecastin3Years5.6%

Current dividend yield vs market & industry

Notable Dividend: SFC's dividend (5.5%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: SFC's dividend (5.5%) is low compared to the top 25% of dividend payers in the Australian market (5.55%).


Stability and Growth of Payments

Stable Dividend: SFC's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.3%), SFC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SFC's dividends in 3 years are forecast to be covered by earnings (63.4% payout ratio).


Next Steps

Management

What is the CEO of Schaffer's salary, the management and board of directors tenure and is there insider trading?

9.6yrs

Average management tenure


CEO

John Schaffer (69yo)

32.9yrs

Tenure

AU$1,393,895

Compensation

Mr. John Michael Schaffer, BCom (Hons) FCPA FAICD, has been Managing Director at Schaffer Corporation Limited since 1987 and has been its Chairman since 1988. Mr. Schaffer has been Chairman of Howe Automot ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD949.91K) is above average for companies of similar size in the Australian market ($USD259.85K).

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


Management Age and Tenure

9.6yrs

Average Tenure

53yo

Average Age

Experienced Management: SFC's management team is seasoned and experienced (9.6 years average tenure).


Board Age and Tenure

20.5yrs

Average Tenure

69yo

Average Age

Experienced Board: SFC's board of directors are seasoned and experienced ( 20.5 years average tenure).


Insider Trading

Insider Buying: SFC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$73,50029 Nov 19
Michael Perrott
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Independent Director
Shares5,000
Max PriceAU$14.70
BuyAU$32,66030 Aug 19
David Schwartz
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Independent Director
Shares2,300
Max PriceAU$14.20
BuyAU$177,50030 Aug 19
John Schaffer
EntityIndividual
Role
Chief Executive Officer
Chairman & MD
Shares12,500
Max PriceAU$14.20

Ownership Breakdown

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


Management Team

  • Anton Mayer (77yo)

    Executive Director

    • Tenure: 18.1yrs
    • Compensation: AU$951.54k
  • John Schaffer (69yo)

    Chairman & MD

    • Tenure: 32.9yrs
    • Compensation: AU$1.39m
  • Jason Walsh (48yo)

    General Manager of Delta Corporation Limited

    • Tenure: 10.4yrs
    • Compensation: AU$351.15k
  • Mike Falconer (65yo)

    Group General Manager of Schaffer Building Products Group

    • Tenure: 0yrs
    • Compensation: AU$508.22k
  • Jason Cantwell (47yo)

    Group Financial Controller & Company Secretary

    • Tenure: 8.8yrs
    • Compensation: AU$301.72k
  • Ralph Leib (48yo)

    Chief Financial Officer

    • Tenure: 2.4yrs
    • Compensation: AU$1.24m
  • Dan Birks (53yo)

    General Manager of Howe Automotive Ltd

    • Tenure: 3.9yrs
    • Compensation: AU$1.63m

Board Members

  • Michael Perrott (69yo)

    Non-Executive Independent Director

    • Tenure: 14.8yrs
    • Compensation: AU$81.37k
  • Anton Mayer (77yo)

    Executive Director

    • Tenure: 18.1yrs
    • Compensation: AU$951.54k
  • Danielle Blain (75yo)

    Non Executive Director

    • Tenure: 32.5yrs
    • Compensation: AU$83.00k
  • John Schaffer (69yo)

    Chairman & MD

    • Tenure: 32.9yrs
    • Compensation: AU$1.39m
  • David Schwartz (65yo)

    Non-Executive Independent Director

    • Tenure: 20.5yrs
    • Compensation: AU$83.94k

Company Information

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


Key Information

  • Name: Schaffer Corporation Limited
  • Ticker: SFC
  • Exchange: ASX
  • Founded: 1955
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: AU$198.947m
  • Shares outstanding: 13.67m
  • Website: https://www.schaffer.com.au

Number of Employees


Location

  • Schaffer Corporation Limited
  • 1305 Hay Street
  • West Perth
  • Western Australia
  • 6005
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SFCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
SFCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

Schaffer Corporation Limited, a diversified industrial company, manufactures and sells automotive leather and building materials primarily in Australia, Asia, and Europe. The company’s Automotive Leather s ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 10:32
End of Day Share Price2019/12/10 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.