ASX:WOW

Stock Analysis Report

Executive Summary

Woolworths Group Limited operates retail stores.


Snowflake Analysis

Excellent balance sheet average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.9%

WOW

0.2%

AU Consumer Retailing

-0.07%

AU Market


1 Year Return

35.0%

WOW

10.2%

AU Consumer Retailing

19.1%

AU Market

Return vs Industry: WOW exceeded the Australian Consumer Retailing industry which returned 10.2% over the past year.

Return vs Market: WOW exceeded the Australian Market which returned 19.1% over the past year.


Shareholder returns

WOWIndustryMarket
7 Day1.9%0.2%-0.07%
30 Day1.2%-1.0%-0.6%
90 Day4.7%0.9%0.4%
1 Year39.2%35.0%12.6%10.2%25.0%19.1%
3 Year85.2%67.4%29.9%20.9%36.0%17.4%
5 Year58.9%31.9%48.5%31.6%63.2%26.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

3.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WOW (A$38.43) is trading below our estimate of fair value (A$39.89)

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


Price To Earnings Ratio

PE vs Industry: WOW is poor value based on its PE Ratio (33.6x) compared to the Consumer Retailing industry average (20.7x).

PE vs Market: WOW is poor value based on its PE Ratio (33.6x) compared to the Australian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: WOW is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: WOW is overvalued based on its PB Ratio (4.7x) compared to the XX Consumer Retailing industry average (1.5x).


Next Steps

Future Growth

How is Woolworths Group forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WOW's forecast earnings growth (9.1% per year) is above the savings rate (1.1%).

Earnings vs Market: WOW's earnings (9.1% per year) are forecast to grow slower than the Australian market (9.3% per year).

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

Revenue vs Market: WOW's revenue (3.2% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: WOW's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WOW's Return on Equity is forecast to be low in 3 years time (17.3%).


Next Steps

Past Performance

How has Woolworths Group performed over the past 5 years?

-13.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WOW has high quality earnings.

Growing Profit Margin: WOW's current net profit margins (2.5%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: WOW's earnings have declined by -13.6% per year over the past 5 years.

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

Earnings vs Industry: WOW had negative earnings growth (-7%) over the past year, making it difficult to compare to the Consumer Retailing industry average (2.1%).


Return on Equity

High ROE: WOW's Return on Equity (14.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Woolworths Group's financial position?


Financial Position Analysis

Short Term Liabilities: WOW's short term assets (A$6.3B) do not cover its short term liabilities (A$8.6B).

Long Term Liabilities: WOW's short term assets (A$6.3B) exceed its long term liabilities (A$4.2B).


Debt to Equity History and Analysis

Debt Level: WOW's debt to equity ratio (29.3%) is considered satisfactory.

Reducing Debt: WOW's debt to equity ratio has reduced from 41.4% to 29.3% over the past 5 years.

Debt Coverage: WOW's debt is well covered by operating cash flow (94.3%).

Interest Coverage: WOW's interest payments on its debt are well covered by EBIT (20.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: WOW's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

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

2.65%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%2.4%markettop25%5.5%industryaverage2.0%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: WOW's dividend (2.65%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: WOW's dividend (2.65%) is low compared to the top 25% of dividend payers in the Australian market (5.55%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (89.2%), WOW's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WOW's dividends in 3 years are forecast to be covered by earnings (72.8% payout ratio).


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Brad Banducci 0

3.8yrs

Tenure

AU$7,706,283

Compensation

Mr. Bradford Leon Banducci, also known as Brad, BComm (Acc), LLB, MBA, has been the Chief Executive Officer and Managing Director at Woolworths Group Limited since February 26, 2016. He serves as the Chief ...


CEO Compensation Analysis

Compensation vs Market: Brad's total compensation ($USD5.25M) is above average for companies of similar size in the Australian market ($USD3.81M).

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


Management Age and Tenure

1.2yrs

Average Tenure

Experienced Management: WOW's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

3.8yrs

Average Tenure

56yo

Average Age

Experienced Board: WOW's board of directors are considered experienced (3.8 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$691,983,01528 May 19
BlackRock, Inc.
EntityCompany
Shares20,429,603
Max PriceAU$34.93
BuyAU$1,097,109,31828 May 19
BlackRock, Inc.
EntityCompany
Shares31,779,417
Max PriceAU$34.82

Ownership Breakdown

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


Management Team

  • Paul van Meurs

    Head of Investor Relations

    • Tenure: 0yrs
  • Colin Storrie (51yo)

    Managing Director of Group Portfolio

    • Tenure: 0yrs
    • Compensation: AU$2.34m
  • Brad Banducci

    MD, CEO & Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$7.71m
  • David Marr

    Chief Operating Officer

    • Tenure: 0.3yrs
    • Compensation: AU$3.33m
  • Bill Reid

    Chief Legal Officer

    • Tenure: 0.2yrs
  • Steve Donohue

    Managing Director of Endeavour Drinks Group

    • Tenure: 1.9yrs
    • Compensation: AU$2.22m
  • John Hunt

    Chief Information Officer

    • Tenure: 2.9yrs
  • Claire Peters

    Managing Director of Woolworths Supermarkets

    • Tenure: 2.5yrs
    • Compensation: AU$3.37m
  • Stephen Harrison

    Chief Financial Officer

    • Tenure: 0.3yrs
  • Andrew Hicks

    Chief Marketing Officer

    • Tenure: 0.5yrs

Board Members

  • Gordon Cairns (68yo)

    Independent Chairman

    • Tenure: 4.3yrs
    • Compensation: AU$792.04k
  • Jillian Broadbent (71yo)

    Independent Non-Executive Director

    • Tenure: 8.9yrs
    • Compensation: AU$326.51k
  • Michael Ullmer (68yo)

    Independent Non-Executive Director

    • Tenure: 7.9yrs
    • Compensation: AU$322.33k
  • Holly Kramer (54yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$333.50k
  • Kathee Tesija (56yo)

    Independent Non-Executive Director

    • Tenure: 3.6yrs
    • Compensation: AU$357.96k
  • Scott Perkins (54yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: AU$367.92k
  • Brad Banducci

    MD, CEO & Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$7.71m
  • Jennifer Carr-Smith

    Independent Non-Executive Director

    • Tenure: 0.6yrs
    • Compensation: AU$43.38k
  • Siobhan McKenna (47yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$316.25k

Company Information

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


Key Information

  • Name: Woolworths Group Limited
  • Ticker: WOW
  • Exchange: ASX
  • Founded: 1924
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: AU$48.203b
  • Shares outstanding: 1.25b
  • Website: https://www.woolworthsgroup.com.au

Number of Employees


Location

  • Woolworths Group Limited
  • 1 Woolworths Way
  • Bella Vista
  • New South Wales
  • 2153
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WOLW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 1993
WOWASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 1993
WWRDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 1993
WOWCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 1993

Biography

Woolworths Group Limited operates retail stores. It operates through Australian Food, New Zealand Food, Endeavour Drinks, BIG W, and Hotels segments. The Australian Food segment procures and resells food a ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 10:31
End of Day Share Price2019/12/11 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.