ASX:NWL

Stock Analysis Report

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Market Cap

AU$3.8b

Last Updated

2021/08/04 08:08 UTC

Data Sources

Company Financials +

Executive Summary

Netwealth Group Limited, a financial services company, engages in the wealth management business in Australia. More Details


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: NWL is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NWL's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

4.0%

NWL

0.9%

AU Capital Markets

1.3%

AU Market


1 Year Return

20.7%

NWL

20.2%

AU Capital Markets

27.5%

AU Market

Return vs Industry: NWL matched the Australian Capital Markets industry which returned 20.2% over the past year.

Return vs Market: NWL underperformed the Australian Market which returned 27.5% over the past year.


Shareholder returns

NWLIndustryMarket
7 Day4.0%0.9%1.3%
30 Day-4.0%-0.02%2.3%
90 Day16.0%4.6%5.6%
1 Year22.1%20.7%24.2%20.2%32.2%27.5%
3 Year118.5%108.3%44.2%28.3%35.2%18.8%
5 Yearn/a106.9%67.4%65.9%34.0%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

73.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NWL (A$15.6) is trading above our estimate of fair value (A$7.87)

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


Price To Earnings Ratio

PE vs Industry: NWL is poor value based on its PE Ratio (73.1x) compared to the Australian Capital Markets industry average (22x).

PE vs Market: NWL is poor value based on its PE Ratio (73.1x) compared to the Australian market (20.5x).


Price to Earnings Growth Ratio

PEG Ratio: NWL is poor value based on its PEG Ratio (5.5x)


Price to Book Ratio

PB vs Industry: NWL is overvalued based on its PB Ratio (43.3x) compared to the AU Capital Markets industry average (1.4x).


Future Growth

How is Netwealth Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

13.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NWL's forecast earnings growth (13.2% per year) is above the savings rate (1.9%).

Earnings vs Market: NWL's earnings (13.2% per year) are forecast to grow faster than the Australian market (13.2% per year).

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

Revenue vs Market: NWL's revenue (14% per year) is forecast to grow faster than the Australian market (5.1% per year).

High Growth Revenue: NWL's revenue (14% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NWL's Return on Equity is forecast to be very high in 3 years time (61.8%).


Past Performance

How has Netwealth Group performed over the past 5 years?

31.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NWL has high quality earnings.

Growing Profit Margin: NWL's current net profit margins (36.9%) are higher than last year (36.1%).


Past Earnings Growth Analysis

Earnings Trend: NWL's earnings have grown significantly by 31.7% per year over the past 5 years.

Accelerating Growth: NWL's earnings growth over the past year (28.5%) is below its 5-year average (31.7% per year).

Earnings vs Industry: NWL earnings growth over the past year (28.5%) exceeded the Capital Markets industry 1%.


Return on Equity

High ROE: NWL's Return on Equity (59.2%) is considered outstanding.


Financial Health

How is Netwealth Group's financial position?


Financial Position Analysis

Short Term Liabilities: NWL's short term assets (A$99.5M) exceed its short term liabilities (A$21.5M).

Long Term Liabilities: NWL's short term assets (A$99.5M) exceed its long term liabilities (A$1.5M).


Debt to Equity History and Analysis

Debt Level: NWL is debt free.

Reducing Debt: NWL has not had any debt for past 5 years.

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

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


Balance Sheet


Dividend

What is Netwealth Group current dividend yield, its reliability and sustainability?

1.16%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NWL's dividend (1.16%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (1.96%).

High Dividend: NWL's dividend (1.16%) is low compared to the top 25% of dividend payers in the Australian market (4.98%).


Stability and Growth of Payments

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

Growing Dividend: NWL's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79%), NWL's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NWL's dividends in 3 years are forecast to be covered by earnings (77.3% payout ratio).


Next Steps

Management

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

5.4yrs

Average management tenure


CEO

Michael Heine

6.58yrs

Tenure

AU$216,046

Compensation

Mr. Michael Max Heine has been a Joint Managing Director and Director of Netwealth Group Limited since January 2015 and 1999 respectively. Mr. Heine was instrumental in the establishment of Netwealth in 19...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD159.42K) is below average for companies of similar size in the Australian market ($USD1.70M).

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


Leadership Team

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


Board Members

Experienced Board: NWL's board of directors are considered experienced (7 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 been diluted in the past year, with total shares outstanding growing by 2.6%.


Top Shareholders

Company Information

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


Key Information

  • Name: Netwealth Group Limited
  • Ticker: NWL
  • Exchange: ASX
  • Founded: 1999
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: AU$3.847b
  • Shares outstanding: 243.80m
  • Website: https://www.netwealth.com.au

Location

  • Netwealth Group Limited
  • 180 Flinders Street
  • Level 6
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings


Biography

Netwealth Group Limited, a financial services company, engages in the wealth management business in Australia. The company offers superannuation products, including accumulation and retirement income produ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/04 08:08
End of Day Share Price2021/08/04 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


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.