Korvest (ASX:KOV) - Share price, News & Analysis

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

KOV (A$6.98) is trading below our estimate of [[fair value]] (A$12.05)

KOV fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	4/6

KOV Stock Overview

Rewards

Trading at 42.1% below our estimate of its fair value

Earnings grew by 116.7% over the past year

Risk Analysis

High level of non-cash earnings

Dividend of 7.16% is not well covered by earnings

Does not have a meaningful market cap (A$80M)

Korvest Competitors

LaserBond

ASX:LBL

AU$74.3m

XRF Scientific

ASX:XRF

AU$76.1m

VEEM

ASX:VEE

AU$51.6m

Environmental Group

ASX:EGL

AU$53.1m

Price History & Performance

Summary of all time highs, changes and price drops for Korvest
Historical stock prices
Current Share Price	AU$6.98
52 Week High	AU$8.25
52 Week Low	AU$4.87
Beta	0.71
1 Month Change	-10.63%
3 Month Change	-2.38%
1 Year Change	43.33%
3 Year Change	158.52%
5 Year Change	195.76%
Change since IPO	267.37%

Recent News & Updates

Jan 24

Korvest's (ASX:KOV) Shareholders Will Receive A Bigger Dividend Than Last Year

Korvest Ltd's ( ASX:KOV ) dividend will be increasing to AU$0.25 on 4th of April. This takes the dividend yield to...

Dec 03

Should You Be Adding Korvest (ASX:KOV) To Your Watchlist Today?

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Oct 15

It's Unlikely That Korvest Ltd's (ASX:KOV) CEO Will See A Huge Pay Rise This Year

CEO Chris Hartwig has done a decent job of delivering relatively good performance at Korvest Ltd ( ASX:KOV ) recently...

Shareholder Returns

	KOV	AU Machinery	AU Market
7D	-0.7%	-3.1%	1.4%
1Y	43.3%	-55.9%	-11.3%

Return vs Industry: KOV exceeded the Australian Machinery industry which returned -55.9% over the past year.

Return vs Market: KOV exceeded the Australian Market which returned -11.3% over the past year.

Price Volatility

Is KOV's price volatile compared to industry and market?
KOV volatility
KOV Average Weekly Movement	4.9%
Machinery Industry Average Movement	9.5%
Market Average Movement	9.7%
10% most volatile stocks in AU Market	16.3%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: KOV is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: KOV's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1970	207	Chris Hartwig	https://www.korvest.com.au

Korvest Ltd, together with its subsidiaries, engages in hot dip galvanizing, sheet metal fabrication, manufacture of cable and pipe support systems and fittings, and design and assembly of access systems for large mobile equipment in Australia. It operates through two segments, Industrial Products and Production. The Industrial Products segment manufactures electrical and cable support systems, and steel fabrication and access systems.

Korvest Fundamentals Summary

How do Korvest's earnings and revenue compare to its market cap?
KOV fundamental statistics
Market Cap	AU$80.03m
Earnings (TTM)	AU$10.26m
Revenue (TTM)	AU$88.76m

7.8x

P/E Ratio

0.9x

P/S Ratio

Is KOV overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KOV income statement (TTM)
Revenue	AU$88.76m
Cost of Revenue	AU$53.00m
Gross Profit	AU$35.76m
Other Expenses	AU$25.51m
Earnings	AU$10.26m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.89
Gross Margin	40.29%
Net Profit Margin	11.55%
Debt/Equity Ratio	0%

How did KOV perform over the long term?

See historical performance and comparison

Dividends

7.2%

Current Dividend Yield

50%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is KOV 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
PEG Ratio

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KOV. This is calculated by dividing KOV's market cap by their current preferred multiple.
What is KOV's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$80.03m

KOV 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	0.9x
Enterprise Value/EBITDA	5.5x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

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

KOV PE Ratio vs Peers

The above table shows the PE ratio for KOV vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.2x
LBL LaserBond	23.4x	35.0%	AU$74.3m
XRF XRF Scientific	13.7x	5.0%	AU$76.1m
VEE VEEM	23x	49.0%	AU$51.6m
EGL Environmental Group	24.8x	n/a	AU$53.1m
KOV Korvest	7.8x	n/a	AU$80.0m

Forward PE

Price-To-Earnings vs Peers: KOV is good value based on its Price-To-Earnings Ratio (7.8x) compared to the peer average (21.2x).

Price to Earnings Ratio vs Industry

How does KOV's PE Ratio compare vs other companies in the Global Machinery Industry?

Price-To-Earnings vs Industry: KOV is good value based on its Price-To-Earnings Ratio (7.8x) compared to the Global Machinery industry average (18.1x)

Price to Earnings Ratio vs Fair Ratio

What is KOV'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.

KOV PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.8x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate KOV's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

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

Below Fair Value: KOV (A$6.98) is trading below our estimate of fair value (A$12.05)

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

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate KOV's PEG Ratio to determine if it is good value.

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Future Growth

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

Future Growth Score

0/6

Future Growth Score 0/6

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

-5.0%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if KOV's forecast earnings growth is above the savings rate (1.8%).

Earnings vs Market: Insufficient data to determine if KOV's earnings are forecast to grow faster than the Australian market

High Growth Earnings: Insufficient data to determine if KOV's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KOV's revenue is expected to decline over the next 3 years (-5% per year).

High Growth Revenue: KOV's revenue is forecast to decline over the next 3 years (-5% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

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

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Past Performance

How has Korvest performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

56.9%

Historical annual earnings growth

Earnings and Revenue History

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

Growing Profit Margin: KOV's current net profit margins (11.6%) are higher than last year (7.9%).

Past Earnings Growth Analysis

Earnings Trend: KOV has become profitable over the past 5 years, growing earnings by 56.9% per year.

Accelerating Growth: KOV's earnings growth over the past year (116.7%) exceeds its 5-year average (56.9% per year).

Earnings vs Industry: KOV earnings growth over the past year (116.7%) exceeded the Machinery industry -28.5%.

Return on Equity

High ROE: KOV's Return on Equity (25.1%) is considered high.

Discover strong past performing companies

Financial Health

How is Korvest'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: KOV's short term assets (A$38.6M) exceed its short term liabilities (A$13.4M).

Long Term Liabilities: KOV's short term assets (A$38.6M) exceed its long term liabilities (A$6.8M).

Debt to Equity History and Analysis

Debt Level: KOV is debt free.

Reducing Debt: KOV had no debt 5 years ago.

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

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

Balance Sheet

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Dividend

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

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

7.16%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: KOV's dividend (7.16%) is higher than the bottom 25% of dividend payers in the Australian market (2.74%).

High Dividend: KOV's dividend (7.16%) is in the top 25% of dividend payers in the Australian market (6.85%)

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (49.9%), KOV's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (1797.2%), KOV'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?

5.4yrs

Average management tenure

CEO

Chris Hartwig (50 yo)

4.33yrs

Tenure

AU$637,063

Compensation

Mr. Chris A. Hartwig, BA(Acc), MAICD, has been Managing Director and Director of Korvest Ltd since February 28, 2018. Mr. Hartwig served as Executive General Manager of Sales & Marketing at Korvest Ltd. Mr...

CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD442.77K) is above average for companies of similar size in the Australian market ($USD288.24K).

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

Leadership Team

Experienced Management: KOV's management team is seasoned and experienced (5.4 years average tenure).

Board Members

Experienced Board: KOV's board of directors are considered experienced (6.7 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: KOV 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.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30