ASX:SSM

Stock Analysis Report

Executive Summary

Service Stream Limited accesses, designs, builds, installs, and maintains networks in Australia.

Snowflake

Fundamentals

Excellent balance sheet with proven track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

5.3%

SSM

0.7%

AU Construction

0.1%

AU Market


1 Year Return

64.9%

SSM

-20.7%

AU Construction

11.9%

AU Market

Return vs Industry: SSM exceeded the Australian Construction industry which returned -20.7% over the past year.

Return vs Market: SSM exceeded the Australian Market which returned 11.9% over the past year.


Shareholder returns

SSMIndustryMarket
7 Day5.3%0.7%0.1%
30 Day1.5%0.8%-1.1%
90 Day-5.5%-5.9%-1.4%
1 Year71.3%64.9%-17.7%-20.7%18.5%11.9%
3 Year160.5%131.8%29.8%17.7%36.4%18.1%
5 Year1770.5%1334.3%58.4%24.1%50.9%16.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

8.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SSM (A$2.77) is trading below our estimate of fair value (A$3.04)

Significantly Below Fair Value: SSM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SSM is poor value based on its PE Ratio (21.2x) compared to the Construction industry average (14.1x).

PE vs Market: SSM is poor value based on its PE Ratio (21.2x) compared to the Australian market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: SSM is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: SSM is overvalued based on its PB Ratio (3.6x) compared to the AU Construction industry average (1.4x).


Next Steps

Future Growth

How is Service Stream forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

6.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SSM's forecast earnings growth (6.9% per year) is above the savings rate (2.3%).

Earnings vs Market: SSM's earnings (6.9% per year) are forecast to grow slower than the Australian market (10.2% per year).

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

Revenue vs Market: SSM's revenue (6.9% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: SSM's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SSM's Return on Equity is forecast to be low in 3 years time (17.9%).


Next Steps

Past Performance

How has Service Stream performed over the past 5 years?

37.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SSM's earnings have grown significantly by 37.9% per year over the past 5 years.

Accelerating Growth: SSM's earnings growth over the past year (21.3%) is below its 5-year average (37.9% per year).

Earnings vs Industry: SSM earnings growth over the past year (21.3%) exceeded the Construction industry 12.2%.


Return on Equity

High ROE: SSM's Return on Equity (16.2%) is considered low.


Return on Assets

ROA vs Industry: SSM has a higher Return on Assets than the Construction industry average last year.


Return on Capital Employed

ROCE Improving: SSM has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Service Stream's financial position?


Financial Position Analysis

Short Term Liabilities: SSM's short term assets (A$267.5M) exceeds its short term liabilities (A$214.1M)

Long Term Liabilities: SSM's short term assets (267.5M) exceeds its long term liabilities (85.3M)


Debt to Equity History and Analysis

Debt Level: SSM's debt to equity ratio (19.5%) is considered satisfactory

Reducing Debt: SSM's debt to equity ratio has increased from 9% to 19.5% over the past 5 years.

Debt Coverage: SSM's debt is well covered by operating cash flow (99.4%).

Interest Coverage: SSM's interest payments on its debt are well covered by EBIT (379.6x coverage).


Balance Sheet

Inventory Level: SSM has a low level of unsold assets or inventory.

Debt Coverage by Assets: SSM's debt is covered by short term assets (assets are 4.466220x debt).


Next Steps

Dividend

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

3.25%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%2.4%markettop25%5.6%industryaverage4.2%forecastin3Years3.7%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SSM's dividend (3.25%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: SSM's dividend (3.25%) is low compared to the top 25% of dividend payers in the Australian market (5.58%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (68.8%), SSM's dividend payments are covered by earnings.


Future Payout to Shareholders

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


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Leigh MacKender 0

5.4yrs

Tenure

AU$2,105,328

Compensation

Mr. Leigh Mackender, BEng (Civil) (Syd) has been Managing Director of Service Stream Limited since May 26, 2014 and served as its Executive General Manager of AMRS from March 21, 2011 to May 2014. Mr. Mack ...


CEO Compensation Analysis

Compensation vs. Market: Leigh's total compensation ($USD1.44M) is about average for companies of similar size in the Australian market ($USD1.00M).

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


Management Age and Tenure

5.8yrs

Average Tenure

Experienced Management: SSM's management team is seasoned and experienced (5.8 years average tenure).


Board Age and Tenure

3.9yrs

Average Tenure

59.5yo

Average Age

Experienced Board: SSM's board of directors are considered experienced (3.9 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellAU$2,699,86622 Oct 19
Leigh MacKender
EntityIndividual
Role
Chief Executive Officer
MD & Director
Shares1,000,000
Max PriceAU$2.70
BuyAU$452,90728 Jul 19
New York Life Investment Management LLC
EntityCompany
Shares183,019
Max PriceAU$2.50
SellAU$663,04428 Jul 19
New York Life Investment Management LLC
EntityCompany
Shares268,522
Max PriceAU$2.47
BuyAU$29,204,69915 Apr 19
New York Life Investment Management LLC
EntityCompany
Shares13,840,996
Max PriceAU$2.11
SellAU$1,472,91115 Apr 19
New York Life Investment Management LLC
EntityCompany
Shares643,532
Max PriceAU$2.29
BuyAU$2,433,00625 Mar 19
Vinva Investment Management
EntityCompany
Shares1,232,812
Max PriceAU$1.97
SellAU$2,811,90025 Mar 19
Vinva Investment Management
EntityCompany
Shares1,253,369
Max PriceAU$2.24
SellAU$4,69714 Feb 19
Brett Gallagher
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares2,225,140
Max PriceAU$0.0021
SellAU$980,17414 Feb 19
Peter Dempsey
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares441,775
Max PriceAU$2.22
SellAU$2,939,99914 Feb 19
Leigh MacKender
EntityIndividual
Role
Chief Executive Officer
MD & Director
Shares1,400,000
Max PriceAU$2.10
SellAU$210,34204 Feb 19
Vinva Investment Management
EntityCompany
Shares124,991
Max PriceAU$1.68
BuyAU$4,831,95104 Feb 19
Vinva Investment Management
EntityCompany
Shares2,539,922
Max PriceAU$1.90

Ownership Breakdown


Management Team

  • Samantha Grant

    Founder of Total Communications Infrastructure Ltd

    • Tenure: 0yrs
  • Bob Grant

    Chief Financial Officer

    • Tenure: 9.3yrs
    • Compensation: AU$1.59m
  • Leigh MacKender

    MD & Director

    • Tenure: 5.4yrs
    • Compensation: AU$2.11m
  • Juliet Fake

    Executive General Manager of People & Culture

    • Tenure: 6.3yrs
  • Vicki Letcher

    Company Secretary

    • Tenure: 7.2yrs
  • Chris Chapman

    Company Secretary & General Counsel

    • Tenure: 4.2yrs
  • Douglas Young

    Chief Information Officer

    • Tenure: 1.3yrs

Board Members

  • Debbie Page (60yo)

    Non Executive Independent Director

    • Tenure: 9.1yrs
    • Compensation: AU$125.00k
  • Raelene Murphy (59yo)

    Independent Non-Executive Director

    • Tenure: 3.9yrs
    • Compensation: AU$118.00k
  • Peter Dempsey (72yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: AU$118.00k
  • Brett Gallagher (58yo)

    Chairman of the Board

    • Tenure: 4.6yrs
    • Compensation: AU$160.00k
  • Leigh MacKender

    MD & Director

    • Tenure: 5.4yrs
    • Compensation: AU$2.11m
  • Greg Adcock

    Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: AU$118.00k
  • Tom Coen

    Non-Executive Director

    • Tenure: 0.7yrs
    • Compensation: AU$49.17k

Company Information

Service Stream Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Service Stream Limited
  • Ticker: SSM
  • Exchange: ASX
  • Founded: 1996
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: AU$1.129b
  • Shares outstanding: 407.48m
  • Website: https://www.servicestream.com.au

Number of Employees


Location

  • Service Stream Limited
  • 357 Collins Street
  • Level 4
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SSMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 2004
SSMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 2004

Biography

Service Stream Limited accesses, designs, builds, installs, and maintains networks in Australia. It operates through four segments: Fixed Communications, Network Construction, Energy & Water, and Comdain I ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 10:31
End of Day Share Price2019/10/22 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.