ASX:SIQ

Stock Analysis Report

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Market Cap

AU$945.5m

Last Updated

2021/06/23 03:08 UTC

Data Sources

Company Financials +

Executive Summary

Smartgroup Corporation Ltd provides employee management services. More Details


Snowflake Analysis

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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

Volatility Over Time: SIQ's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-1.4%

SIQ

2.3%

AU Professional Services

-0.7%

AU Market


1 Year Return

15.1%

SIQ

53.5%

AU Professional Services

26.8%

AU Market

Return vs Industry: SIQ underperformed the Australian Professional Services industry which returned 53.5% over the past year.

Return vs Market: SIQ underperformed the Australian Market which returned 26.8% over the past year.


Shareholder returns

SIQIndustryMarket
7 Day-1.4%2.3%-0.7%
30 Day9.2%13.8%4.0%
90 Day12.7%24.8%7.6%
1 Year24.4%15.1%58.6%53.5%31.0%26.8%
3 Year-24.7%-38.0%52.2%36.2%34.0%17.9%
5 Year65.8%26.9%87.7%58.9%73.0%41.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

46.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SIQ (A$7.26) is trading below our estimate of fair value (A$13.52)

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


Price To Earnings Ratio

PE vs Industry: SIQ is poor value based on its PE Ratio (22.8x) compared to the Australian Professional Services industry average (18.9x).

PE vs Market: SIQ is poor value based on its PE Ratio (22.8x) compared to the Australian market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: SIQ is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: SIQ is good value based on its PB Ratio (3.5x) compared to the AU Professional Services industry average (3.8x).


Future Growth

How is Smartgroup forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SIQ's forecast earnings growth (11.8% per year) is above the savings rate (1.9%).

Earnings vs Market: SIQ's earnings (11.8% per year) are forecast to grow slower than the Australian market (13.7% per year).

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

Revenue vs Market: SIQ's revenue (4.4% per year) is forecast to grow slower than the Australian market (5.4% per year).

High Growth Revenue: SIQ's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SIQ's Return on Equity is forecast to be high in 3 years time (26.6%)


Past Performance

How has Smartgroup performed over the past 5 years?

15.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SIQ has high quality earnings.

Growing Profit Margin: SIQ's current net profit margins (19.1%) are lower than last year (24.6%).


Past Earnings Growth Analysis

Earnings Trend: SIQ's earnings have grown by 15.3% per year over the past 5 years.

Accelerating Growth: SIQ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SIQ had negative earnings growth (-32.7%) over the past year, making it difficult to compare to the Professional Services industry average (1.2%).


Return on Equity

High ROE: SIQ's Return on Equity (15.3%) is considered low.


Financial Health

How is Smartgroup's financial position?


Financial Position Analysis

Short Term Liabilities: SIQ's short term assets (A$94.1M) do not cover its short term liabilities (A$101.5M).

Long Term Liabilities: SIQ's short term assets (A$94.1M) exceed its long term liabilities (A$36.0M).


Debt to Equity History and Analysis

Debt Level: SIQ's debt to equity ratio (9.1%) is considered satisfactory.

Reducing Debt: SIQ's debt to equity ratio has reduced from 63.9% to 9.1% over the past 5 years.

Debt Coverage: SIQ's debt is well covered by operating cash flow (231.6%).

Interest Coverage: SIQ's interest payments on its debt are well covered by EBIT (22.8x coverage).


Balance Sheet


Dividend

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

6.75%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SIQ's dividend (6.75%) is higher than the bottom 25% of dividend payers in the Australian market (1.99%).

High Dividend: SIQ's dividend (6.75%) is in the top 25% of dividend payers in the Australian market (5%)


Stability and Growth of Payments

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

Growing Dividend: SIQ's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (108.2%), SIQ's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SIQ's dividends in 3 years are forecast to be covered by earnings (68.3% payout ratio).


Next Steps

Management

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

1.6yrs

Average management tenure


CEO

Tim Looi

1.33yrs

Tenure

AU$1,028,449

Compensation

Mr. Timothy Looi, also known as Tim, serves as Managing Director and Chief Executive Officer at Smartgroup Corporation Ltd since February 29, 2020 and serves as its Executive Director since February 29, 20...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD773.97K) is about average for companies of similar size in the Australian market ($USD870.64K).

Compensation vs Earnings: Tim's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: SIQ's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

Experienced Board: SIQ's board of directors are considered experienced (6.6 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

Smartgroup Corporation Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smartgroup Corporation Ltd
  • Ticker: SIQ
  • Exchange: ASX
  • Founded: 1999
  • Industry: Human Resource and Employment Services
  • Sector: Commercial Services
  • Market Cap: AU$945.534m
  • Shares outstanding: 130.24m
  • Website: https://www.smartgroup.com.au

Number of Employees


Location

  • Smartgroup Corporation Ltd
  • 133 Castlereagh Street
  • Level 8
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings


Biography

Smartgroup Corporation Ltd provides employee management services. It operates through Outsourced Administration (OA); Vehicle Services (VS); and Software, Distribution, and Group Services (SDGS) segments. ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/23 03:08
End of Day Share Price2021/06/22 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.