ASX:IPH

Stock Analysis Report

Executive Summary

IPH Limited, together with its subsidiaries, provides intellectual property (IP) services and products worldwide.


Snowflake Analysis

Flawless balance sheet with solid track record.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

4.2%

IPH

1.7%

AU Professional Services

0.4%

AU Market


1 Year Return

65.2%

IPH

30.1%

AU Professional Services

19.5%

AU Market

Return vs Industry: IPH exceeded the Australian Professional Services industry which returned 29.8% over the past year.

Return vs Market: IPH exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

IPHIndustryMarket
7 Day4.2%1.7%0.4%
30 Day8.2%3.8%4.4%
90 Day17.8%9.2%5.0%
1 Year71.1%65.2%34.2%30.1%24.9%19.5%
3 Year109.5%83.3%63.1%49.0%38.6%19.9%
5 Year198.4%145.9%71.3%45.5%60.0%24.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.26x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: IPH (A$9.09) is trading above our estimate of fair value (A$8.83)

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


Price To Earnings Ratio

PE vs Industry: IPH is poor value based on its PE Ratio (33.8x) compared to the Professional Services industry average (20.3x).

PE vs Market: IPH is poor value based on its PE Ratio (33.8x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: IPH is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: IPH is overvalued based on its PB Ratio (6.3x) compared to the AU Professional Services industry average (2.1x).


Next Steps

Future Growth

How is IPH forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

14.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IPH's forecast earnings growth (14.5% per year) is above the savings rate (1.1%).

Earnings vs Market: IPH's earnings (14.5% per year) are forecast to grow faster than the Australian market (9.6% per year).

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

Revenue vs Market: IPH's revenue (14.6% per year) is forecast to grow faster than the Australian market (3.8% per year).

High Growth Revenue: IPH's revenue (14.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IPH's Return on Equity is forecast to be high in 3 years time (23.8%)


Next Steps

Past Performance

How has IPH performed over the past 5 years?

9.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IPH has high quality earnings.

Growing Profit Margin: IPH's current net profit margins (21%) are higher than last year (18.3%).


Past Earnings Growth Analysis

Earnings Trend: IPH's earnings have grown by 9.9% per year over the past 5 years.

Accelerating Growth: IPH's earnings growth over the past year (30.6%) exceeds its 5-year average (9.9% per year).

Earnings vs Industry: IPH earnings growth over the past year (30.6%) exceeded the Professional Services industry 22.2%.


Return on Equity

High ROE: IPH's Return on Equity (18.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is IPH's financial position?


Financial Position Analysis

Short Term Liabilities: IPH's short term assets (A$145.2M) exceed its short term liabilities (A$37.6M).

Long Term Liabilities: IPH's short term assets (A$145.2M) exceed its long term liabilities (A$92.6M).


Debt to Equity History and Analysis

Debt Level: IPH's debt to equity ratio (23.1%) is considered satisfactory.

Reducing Debt: IPH's debt to equity ratio has reduced from 4026.1% to 23.1% over the past 5 years.

Debt Coverage: IPH's debt is well covered by operating cash flow (93.7%).

Interest Coverage: IPH's interest payments on its debt are well covered by EBIT (35.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: IPH's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

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

2.71%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%2.3%markettop25%5.5%industryaverage2.5%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: IPH's dividend (2.75%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: IPH's dividend (2.75%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, IPH has been paying a dividend for less than 10 years.

Growing Dividend: IPH's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.9%), IPH's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IPH's dividends in 3 years are forecast to be covered by earnings (80.4% payout ratio).


Next Steps

Management

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

17.0yrs

Average management tenure


CEO

Andrew Blattman 0

2.2yrs

Tenure

AU$1,727,907

Compensation

Dr. Andrew Blattman serves as Managing Director of IPH Limited and has been its Chief Executive Officer and Director since November 20, 2017. Dr. Blattman serves as the Chief Executive Officer of Spruson & ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD1.19M) is about average for companies of similar size in the Australian market ($USD1.41M).

Compensation vs Earnings: Andrew's compensation has increased by more than 20% in the past year.


Management Age and Tenure

17.0yrs

Average Tenure

Experienced Management: IPH's management team is seasoned and experienced (17 years average tenure).


Board Age and Tenure

5.3yrs

Average Tenure

62yo

Average Age

Experienced Board: IPH's board of directors are considered experienced (5.3 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$2,676,79716 Sep 19
Talabah Pty Limited
EntityCompany
Shares300,000
Max PriceAU$8.92
SellAU$201,08003 Sep 19
Richard Grellman
EntityIndividual
Role
Chairman of the Board
Independent Non-Executive Chairman
Shares21,449
Max PriceAU$9.37
SellAU$1,603,23822 Aug 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares194,193
Max PriceAU$8.32
BuyAU$522,33722 Aug 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares62,269
Max PriceAU$8.56
BuyAU$59,91921 Aug 19
Credit Suisse Asset Management (Switzerland)
EntityCompany
Shares8,032
Max PriceAU$7.46
SellAU$21,933,56821 Aug 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares2,967,014
Max PriceAU$7.39
BuyAU$15,656,14121 Aug 19
Credit Suisse, Investment Banking and Securities Investments
EntityCompany
Shares1,986,567
Max PriceAU$7.88
BuyAU$1,120,58919 Aug 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares167,142
Max PriceAU$6.78
SellAU$11,526,71519 Aug 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares1,432,040
Max PriceAU$8.50
BuyAU$765,83919 Aug 19
Vinva Investment Management
EntityCompany
Shares105,561
Max PriceAU$7.25
SellAU$1,465,48019 Aug 19
Vinva Investment Management
EntityCompany
Shares189,193
Max PriceAU$7.75
SellAU$33,604,35315 Aug 19
Perpetual Limited
EntityCompany
Shares4,103,630
Max PriceAU$8.39
SellAU$45,145,40925 Jul 19
Perpetual Limited
EntityCompany
Shares5,587,777
Max PriceAU$8.27
SellAU$55,71427 Jun 19
Credit Suisse Asset Management (Switzerland)
EntityCompany
Shares7,814
Max PriceAU$7.13
BuyAU$198,26727 Jun 19
Credit Suisse Asset Management (Switzerland)
EntityCompany
Shares29,179
Max PriceAU$6.79
BuyAU$5,585,91226 May 19
The Vanguard Group, Inc.
EntityCompany
Shares786,332
Max PriceAU$7.15
SellAU$751,03726 May 19
The Vanguard Group, Inc.
EntityCompany
Shares112,372
Max PriceAU$6.68
SellAU$208,37423 Apr 19
Vinva Investment Management
EntityCompany
Shares33,245
Max PriceAU$6.27
BuyAU$74,060,94923 Apr 19
Vinva Investment Management
EntityCompany
Shares10,940,608
Max PriceAU$6.77
BuyAU$7,559,51312 Mar 19
Perpetual Limited
EntityCompany
Shares1,368,492
Max PriceAU$5.52
SellAU$21,567,71912 Mar 19
Perpetual Limited
EntityCompany
Shares3,434,118
Max PriceAU$6.28
BuyAU$11,983,85825 Feb 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares2,056,164
Max PriceAU$6.04
SellAU$36,71125 Feb 19
Paradice Investment Management Pty Ltd.
EntityCompany
Shares6,660
Max PriceAU$6.02

Ownership Breakdown

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


Management Team

  • Simon Saunders

    Head of IT & Systems

    • Tenure: 5.3yrs
  • Greg Turner

    Principal

    • Tenure: 35yrs
    • Compensation: AU$128.73k
  • Greg Gurr

    Principal

    • Tenure: 21yrs
  • John Afaras

    Principal

    • Andrew Blattman

      CEO, MD & Director

      • Tenure: 2.2yrs
      • Compensation: AU$1.73m
    • Shahnaz Irani

      Principal

      • Tenure: 20yrs
    • Tracey Berger

      Principal

      • Tenure: 18yrs
    • Paul Massey

      Principal

      • Tenure: 17yrs
    • Philip Heuzenroeder

      Group General Counsel & Company Secretary

      • Tenure: 3.8yrs
    • John Wadley

      Chief Financial Officer

      • Tenure: 3.4yrs
      • Compensation: AU$860.30k

    Board Members

    • Richard Grellman (69yo)

      Independent Non-Executive Chairman

      • Tenure: 5.3yrs
      • Compensation: AU$250.00k
    • John Atkin (62yo)

      Independent Non-Executive Director

      • Tenure: 5.3yrs
      • Compensation: AU$140.00k
    • Jingmin Qian

      Independent Non-Executive Director

      • Tenure: 0.8yrs
      • Compensation: AU$35.00k
    • Robin Low (58yo)

      Independent Non-Executive Director

      • Tenure: 5.3yrs
      • Compensation: AU$140.00k
    • Andrew Blattman

      CEO, MD & Director

      • Tenure: 2.2yrs
      • Compensation: AU$1.73m

    Company Information

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


    Key Information

    • Name: IPH Limited
    • Ticker: IPH
    • Exchange: ASX
    • Founded: 1887
    • Industry: Research and Consulting Services
    • Sector: Commercial Services
    • Market Cap: AU$1.971b
    • Shares outstanding: 213.74m
    • Website: https://www.iphltd.com.au

    Number of Employees


    Location

    • IPH Limited
    • Tower 2
    • Level 24
    • Sydney
    • New South Wales
    • 2000
    • Australia

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    IPHNCHIA (Chi-X Australia)NPV DFD 15/08/19 (EX-XENITHAUAUDNo data
    IPHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2014
    IPHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2014
    1IPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2014

    Biography

    IPH Limited, together with its subsidiaries, provides intellectual property (IP) services and products worldwide. The company operates in three segments: Intellectual Property Services Australia & New Zealand, Intellectual Property Services Asia, and Data and Analytics Software. It offers IP services related to the provision of filing, prosecution, enforcement, and management of patents, designs, trademarks, and other IP; and develops and provides IP data and analytics software under the subscription license model. The company is also provides patent attorney and lawyers services. It serves Fortune Global 500 companies, multinationals, public sector research organizations, SMEs, and professional services firms. IPH Limited was founded in 1887 and is based in Sydney, Australia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 10:46
    End of Day Share Price2020/01/24 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.