ASX:ELD

Stock Analysis Report

Executive Summary

Elders Limited provides livestock, real estate, and wool agency services to rural and regional customers primarily in Australia.

Snowflake

Excellent balance sheet and good value.

Rewards

Trading at 39.7% below its fair value

Earnings are forecast to grow by 11.12% next year

Earnings have grown 22.6% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Current net profit margin (4.6%) is lower than last year (4.9%)

Shareholders have been diluted in the past year


Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

6.2%

ELD

1.3%

AU Food

0.4%

AU Market


1 Year Return

-12.6%

ELD

-10.0%

AU Food

14.8%

AU Market

Return vs Industry: ELD underperformed the Australian Food industry which returned -10% over the past year.

Return vs Market: ELD underperformed the Australian Market which returned 14.8% over the past year.


Shareholder returns

ELDIndustryMarket
7 Day6.2%1.3%0.4%
30 Day6.2%-2.1%0.4%
90 Day0.2%3.1%4.6%
1 Year-7.5%-12.6%-6.7%-10.0%21.4%14.8%
3 Year87.5%71.1%6.6%-0.7%40.2%21.4%
5 Year227.7%188.9%33.3%21.6%54.5%19.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

39.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ELD (A$6.5) is trading below our estimate of fair value (A$10.77)

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


Price To Earnings Ratio

PE vs Industry: ELD is good value based on its PE Ratio (10.4x) compared to the Food industry average (27.2x).

PE vs Market: ELD is good value based on its PE Ratio (10.4x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: ELD is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: ELD is overvalued based on its PB Ratio (1.9x) compared to the AU Food industry average (1.3x).


Next Steps

Future Growth

How is Elders forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

12.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ELD's forecast earnings growth (12.8% per year) is above the savings rate (2.3%).

Earnings vs Market: ELD's earnings (12.8% per year) are forecast to grow faster than the Australian market (9.8% per year).

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

Revenue vs Market: ELD's revenue (4.8% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: ELD's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ELD's Return on Equity is forecast to be low in 3 years time (16.2%).


Next Steps

Past Performance

How has Elders performed over the past 5 years?

22.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ELD has a high level of non-cash earnings.

Growing Profit Margin: ELD's current net profit margins (4.6%) are lower than last year (4.9%).


Past Earnings Growth Analysis

Earnings Trend: ELD's earnings have grown significantly by 22.6% per year over the past 5 years.

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

Earnings vs Industry: ELD had negative earnings growth (-3.3%) over the past year, making it difficult to compare to the Food industry average (-28.6%).


Return on Equity

High ROE: ELD's Return on Equity (15.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Elders's financial position?


Financial Position Analysis

Short Term Liabilities: ELD's short term assets (A$670.3M) exceeds its short term liabilities (A$504.1M)

Long Term Liabilities: ELD's short term assets (670.3M) exceeds its long term liabilities (19.7M)


Debt to Equity History and Analysis

Debt Level: ELD's debt to equity ratio (20.3%) is considered satisfactory

Reducing Debt: ELD's debt to equity ratio has reduced from 275.5% to 20.3% over the past 5 years.

Debt Coverage: ELD's debt is not well covered by operating cash flow (11.2%).

Interest Coverage: ELD's interest payments on its debt are well covered by EBIT (9.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: ELD's debt is covered by short term assets (assets are 6.7x debt).


Next Steps

Dividend

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

2.77%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Elders before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.8%marketbottom25%2.4%markettop25%5.6%industryaverage3.2%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: ELD's dividend (2.77%) is higher than the bottom 25% of dividend payers in the Australian market (2.35%).

High Dividend: ELD's dividend (2.77%) is low compared to the top 25% of dividend payers in the Australian market (5.62%).


Stability and Growth of Payments

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

Growing Dividend: ELD's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.7%), ELD's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ELD's dividends in 3 years are forecast to be well covered by earnings (34.9% payout ratio).


Next Steps

Management

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

6.2yrs

Average management tenure


CEO

Mark Allison (59yo)

5.5yrs

Tenure

AU$1,667,029

Compensation

Mr. Mark Charles Allison, BAgrSc, BEcon, GDM, FAICD, has been the Chief Executive Officer and Managing Director of Elders Limited since May 1, 2014 and also has been its Executive Director since November 1 ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD1.14M) is about average for companies of similar size in the Australian market ($USD991.66K).

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


Management Age and Tenure

6.2yrs

Average Tenure

Experienced Management: ELD's management team is seasoned and experienced (6.2 years average tenure).


Board Age and Tenure

2.0yrs

Average Tenure

60.5yo

Average Age

Experienced Board: ELD's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


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

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Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.7%.


Management Team

  • Mark Allison (59yo)

    CEO, MD & Executive Director

    • Tenure: 5.5yrs
    • Compensation: AU$1.67m
  • Peter Hastings

    General Counsel & Company Secretary

    • Tenure: 9.8yrs
  • Richard Davey

    Chief Financial Officer

    • Tenure: 6.8yrs
    • Compensation: AU$742.23k
  • Tom Russo

    General Manager of Real Estate

    • Tenure: 3.8yrs
  • James Cornish

    General Manager of West Zone

    • Tenure: 8.8yrs
    • Compensation: AU$532.90k
  • Malcolm Hunt

    General Manager of South Zone

    • Tenure: 7.8yrs
    • Compensation: AU$597.00k
  • Sanjeeta Singh

    Joint Company Secretary

    • Tenure: 3.7yrs
  • Karen Ross

    General Manager of Digital

    • Tenure: 3.6yrs
  • Olivia Richardson

    General Manager of People & Culture

    • Tenure: 0yrs

Board Members

  • Ian Wilton (67yo)

    Chairman

    • Tenure: 0.2yrs
    • Compensation: AU$169.33k
  • Diana Eilert (59yo)

    Non-Executive Director

    • Tenure: 2yrs
    • Compensation: AU$149.20k
  • Robyn Clubb (62yo)

    Non-Executive Director

    • Tenure: 4.2yrs
    • Compensation: AU$154.90k
  • Mark Allison (59yo)

    CEO, MD & Executive Director

    • Tenure: 5.5yrs
    • Compensation: AU$1.67m
  • Mike Carroll

    Non-Executive Director

    • Tenure: 1.2yrs
    • Compensation: AU$232.69k

Company Information

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


Key Information

  • Name: Elders Limited
  • Ticker: ELD
  • Exchange: ASX
  • Founded: 1839
  • Industry: Agricultural Products
  • Sector: Food, Beverage & Tobacco
  • Market Cap: AU$920.729m
  • Shares outstanding: 141.65m
  • Website: https://elders.com.au

Number of Employees


Location

  • Elders Limited
  • 80 Grenfell Street
  • Level 10
  • Adelaide
  • South Australia
  • 5000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ELDASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
FTZDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
ELDCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

Elders Limited provides livestock, real estate, and wool agency services to rural and regional customers primarily in Australia. It operates through Network, Feed and Processing, and Other segments. The co ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 10:32
End of Day Share Price2019/11/14 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


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.