Pendal Group (ASX:PDL) - Share price, News & Analysis

Q: What is the Fair Price of PDL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

PDL (A$4.63) is trading below our estimate of [[fair value]] (A$11.59)

PDL fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	2/6
Financial Health	5/6
Dividends	4/6

PDL Stock Overview

Pendal Group Limited is a publicly owned investment manager the firm provides its services to individual and institutional clients.

Rewards

Trading at 60.1% below our estimate of its fair value

Earnings are forecast to grow 3.4% per year

Risk Analysis

Dividend of 8.86% is not well covered by earnings

Pendal Group Competitors

Perpetual

ASX:PPT

AU$1.7b

Pinnacle Investment Management Group

ASX:PNI

AU$1.5b

Magellan Financial Group

ASX:MFG

AU$2.5b

BKI Investment

ASX:BKI

AU$1.2b

Price History & Performance

Summary of all time highs, changes and price drops for Pendal Group
Historical stock prices
Current Share Price	AU$4.63
52 Week High	AU$8.96
52 Week Low	AU$4.04
Beta	0.98
1 Month Change	-9.39%
3 Month Change	-2.53%
1 Year Change	-41.83%
3 Year Change	-36.14%
5 Year Change	-58.92%
Change since IPO	-3.34%

Shareholder Returns

	PDL	AU Capital Markets	AU Market
7D	9.7%	1.9%	2.8%
1Y	-41.8%	-8.8%	-9.6%

Return vs Industry: PDL underperformed the Australian Capital Markets industry which returned -8.8% over the past year.

Return vs Market: PDL underperformed the Australian Market which returned -9.6% over the past year.

Price Volatility

Is PDL's price volatile compared to industry and market?
PDL volatility
PDL Average Weekly Movement	7.7%
Capital Markets Industry Average Movement	5.8%
Market Average Movement	9.8%
10% most volatile stocks in AU Market	16.5%
10% least volatile stocks in AU Market	4.3%

Stable Share Price: PDL is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: PDL's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2007	n/a	Nick Good	https://www.pendalgroup.com

Pendal Group Limited is a publicly owned investment manager the firm provides its services to individual and institutional clients. The firm launches and manages equity, fixed income, multi-assets and balanced mutual funds. It invests in the public equity, fixed income, and alternative investment markets across the globe.

Pendal Group Fundamentals Summary

How do Pendal Group's earnings and revenue compare to its market cap?
PDL fundamental statistics
Market Cap	AU$1.63b
Earnings (TTM)	AU$171.49m
Revenue (TTM)	AU$683.31m

9.6x

P/E Ratio

2.4x

P/S Ratio

Is PDL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PDL income statement (TTM)
Revenue	AU$683.31m
Cost of Revenue	AU$327.18m
Gross Profit	AU$356.13m
Other Expenses	AU$184.64m
Earnings	AU$171.49m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 04, 2022

Earnings per share (EPS)	0.48
Gross Margin	52.12%
Net Profit Margin	25.10%
Debt/Equity Ratio	3.6%

How did PDL perform over the long term?

See historical performance and comparison

Dividends

8.9%

Current Dividend Yield

91%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is PDL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PDL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PDL. This is calculated by dividing PDL's market cap by their current preferred multiple.
What is PDL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$1.63b

PDL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.2x
Enterprise Value/EBITDA	5.9x
PEG Ratio	2.8x

Price to Earnings Ratio vs Peers

How does PDL's PE Ratio compare to its peers?

PDL PE Ratio vs Peers

The above table shows the PE ratio for PDL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.9x
PPT Perpetual	15.7x	17.1%	AU$1.7b
PNI Pinnacle Investment Management Group	19.3x	14.5%	AU$1.5b
MFG Magellan Financial Group	8.1x	-24.5%	AU$2.5b
BKI BKI Investment	15.4x	n/a	AU$1.2b
PDL Pendal Group	9.6x	3.4%	AU$1.6b

Forward PE

Price-To-Earnings vs Peers: PDL is good value based on its Price-To-Earnings Ratio (9.6x) compared to the peer average (14.6x).

Price to Earnings Ratio vs Industry

How does PDL's PE Ratio compare vs other companies in the AU Capital Markets Industry?

Price-To-Earnings vs Industry: PDL is good value based on its Price-To-Earnings Ratio (9.6x) compared to the Australian Capital Markets industry average (13.4x)

Price to Earnings Ratio vs Fair Ratio

What is PDL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PDL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.6x
Fair PE Ratio	15.9x

Price-To-Earnings vs Fair Ratio: PDL is good value based on its Price-To-Earnings Ratio (9.6x) compared to the estimated Fair Price-To-Earnings Ratio (15.9x).

Share Price vs Fair Value

What is the Fair Price of PDL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PDL (A$4.63) is trading below our estimate of fair value (A$11.59)

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

Price to Earnings Growth Ratio

PEG Ratio: PDL is poor value based on its PEG Ratio (2.8x)

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Future Growth

How is Pendal Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PDL's forecast earnings growth (3.4% per year) is above the savings rate (1.8%).

Earnings vs Market: PDL's earnings (3.4% per year) are forecast to grow slower than the Australian market (6% per year).

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

Revenue vs Market: PDL's revenue (3.5% per year) is forecast to grow slower than the Australian market (5.2% per year).

High Growth Revenue: PDL's revenue (3.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: PDL's Return on Equity is forecast to be low in 3 years time (13.8%).

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Past Performance

How has Pendal Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PDL has high quality earnings.

Growing Profit Margin: PDL's current net profit margins (25.1%) are lower than last year (28.1%).

Past Earnings Growth Analysis

Earnings Trend: PDL's earnings have declined by 1.3% per year over the past 5 years.

Accelerating Growth: PDL's earnings growth over the past year (13.2%) exceeds its 5-year average (-1.3% per year).

Earnings vs Industry: PDL earnings growth over the past year (13.2%) underperformed the Capital Markets industry 42.7%.

Return on Equity

High ROE: PDL's Return on Equity (13%) is considered low.

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Financial Health

How is Pendal Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: PDL's short term assets (A$326.3M) exceed its short term liabilities (A$148.3M).

Long Term Liabilities: PDL's short term assets (A$326.3M) exceed its long term liabilities (A$95.6M).

Debt to Equity History and Analysis

Debt Level: PDL has more cash than its total debt.

Reducing Debt: PDL's debt to equity ratio has increased from 0% to 3.6% over the past 5 years.

Debt Coverage: PDL's debt is well covered by operating cash flow (537.2%).

Interest Coverage: PDL's interest payments on its debt are well covered by EBIT (105.6x coverage).

Balance Sheet

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Dividend

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

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

8.86%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PDL's dividend (8.86%) is higher than the bottom 25% of dividend payers in the Australian market (2.73%).

High Dividend: PDL's dividend (8.86%) is in the top 25% of dividend payers in the Australian market (6.67%)

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (90.8%), PDL's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (58.4%), PDL's dividend payments are covered by cash flows.

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Management

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

3.9yrs

Average management tenure

CEO

Nick Good

1.17yrs

Tenure

AU$3,172,623

Compensation

Mr. Nicholas Michael Whateley Good, also known as Nick, is the Director at JOHCM (USA) Inc. He has also served as Chief Executive Officer of the firm. Mr. Good is the Chief Executive Officer of Pendal Grou...

CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD2.20M) is above average for companies of similar size in the Australian market ($USD1.04M).

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

Leadership Team

Experienced Management: PDL's management team is considered experienced (3.9 years average tenure).

Board Members

Experienced Board: PDL's board of directors are considered experienced (3.9 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.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/09/30