Ridley (ASX:RIC) - Share price, News & Analysis

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

RIC (A$1.77) is trading below our estimate of [[fair value]] (A$5.08)

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

RIC Stock Overview

Ridley Corporation Limited, together with its subsidiaries, provides animal nutrition solutions in Australia.

Rewards

Trading at 65.2% below our estimate of its fair value

Earnings are forecast to grow 6.21% per year

Became profitable this year

Risk Analysis

Large one-off items impacting financial results

Ridley Competitors

Select Harvests

ASX:SHV

AU$641.0m

Lynch Group Holdings

ASX:LGL

AU$256.3m

Costa Group Holdings

ASX:CGC

AU$1.4b

Elders

ASX:ELD

AU$2.0b

Price History & Performance

Summary of all time highs, changes and price drops for Ridley
Historical stock prices
Current Share Price	AU$1.77
52 Week High	AU$1.84
52 Week Low	AU$0.99
Beta	0.83
1 Month Change	4.12%
3 Month Change	4.43%
1 Year Change	56.64%
3 Year Change	42.17%
5 Year Change	26.43%
Change since IPO	195.00%

Recent News & Updates

Apr 19

Slowing Rates Of Return At Ridley (ASX:RIC) Leave Little Room For Excitement

If you're looking for a multi-bagger, there's a few things to keep an eye out for. In a perfect world, we'd like to see...

Shareholder Returns

	RIC	AU Food	AU Market
7D	0.6%	-1.8%	1.4%
1Y	56.6%	-13.6%	-11.3%

Return vs Industry: RIC exceeded the Australian Food industry which returned -13.6% over the past year.

Return vs Market: RIC exceeded the Australian Market which returned -11.3% over the past year.

Price Volatility

Is RIC's price volatile compared to industry and market?
RIC volatility
RIC Average Weekly Movement	5.7%
Food Industry Average Movement	6.0%
Market Average Movement	9.7%
10% most volatile stocks in AU Market	16.3%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: RIC is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: RIC's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1987	612	Quinton Hildebrand	https://www.ridley.com.au

Ridley Corporation Limited, together with its subsidiaries, provides animal nutrition solutions in Australia. It operates in two segments, Packaged Feeds and Ingredients, and Bulk Stockfeeds. The company offers packaged products and supplements, such as bagged poultry, dairy, dog, horse, and lifestyle animal feeds, as well as block and loose lick supplements; aquafeed, which includes extruded and steam pelleted products for various fin fish and prawns; and rendered poultry, red meat, and fish products for the pet food, stockfeed, and aquaculture sectors.

Ridley Fundamentals Summary

How do Ridley's earnings and revenue compare to its market cap?
RIC fundamental statistics
Market Cap	AU$565.51m
Earnings (TTM)	AU$37.42m
Revenue (TTM)	AU$966.28m

15.1x

P/E Ratio

0.6x

P/S Ratio

Is RIC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RIC income statement (TTM)
Revenue	AU$966.28m
Cost of Revenue	AU$878.47m
Gross Profit	AU$87.81m
Other Expenses	AU$50.39m
Earnings	AU$37.42m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.12
Gross Margin	9.09%
Net Profit Margin	3.87%
Debt/Equity Ratio	14.7%

How did RIC perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

46%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

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 RIC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RIC. This is calculated by dividing RIC's market cap by their current preferred multiple.
What is RIC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$565.51m

RIC 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	0.6x
Enterprise Value/EBITDA	8.9x
PEG Ratio	2.4x

Price to Earnings Ratio vs Peers

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

RIC PE Ratio vs Peers

The above table shows the PE ratio for RIC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.7x
SHV Select Harvests	24.7x	33.5%	AU$641.0m
LGL Lynch Group Holdings	9.4x	16.9%	AU$256.3m
CGC Costa Group Holdings	33.2x	18.2%	AU$1.4b
ELD Elders	11.4x	-3.2%	AU$2.0b
RIC Ridley	15.1x	6.2%	AU$565.5m

Forward PE

Price-To-Earnings vs Peers: RIC is good value based on its Price-To-Earnings Ratio (15.1x) compared to the peer average (19.7x).

Price to Earnings Ratio vs Industry

How does RIC's PE Ratio compare vs other companies in the Oceanian Food Industry?

Price-To-Earnings vs Industry: RIC is expensive based on its Price-To-Earnings Ratio (15.1x) compared to the Oceanic Food industry average (14.3x)

Price to Earnings Ratio vs Fair Ratio

What is RIC'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.

RIC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.1x
Fair PE Ratio	18.3x

Price-To-Earnings vs Fair Ratio: RIC is good value based on its Price-To-Earnings Ratio (15.1x) compared to the estimated Fair Price-To-Earnings Ratio (18.3x).

Share Price vs Fair Value

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

Below Fair Value: RIC (A$1.77) is trading below our estimate of fair value (A$5.08)

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

Price to Earnings Growth Ratio

PEG Ratio: RIC is poor value based on its PEG Ratio (2.4x)

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Future Growth

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

Future Growth Score

2/6

Future Growth Score 2/6

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

6.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RIC's forecast earnings growth (6.2% per year) is above the savings rate (1.8%).

Earnings vs Market: RIC's earnings (6.2% per year) are forecast to grow faster than the Australian market (6% per year).

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

Revenue vs Market: RIC's revenue (3% per year) is forecast to grow slower than the Australian market (5.2% per year).

High Growth Revenue: RIC's revenue (3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RIC's Return on Equity is forecast to be low in 3 years time (13.6%).

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Past Performance

How has Ridley performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

-12.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RIC has a large one-off gain of A$11.2M impacting its December 31 2021 financial results.

Growing Profit Margin: RIC became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: RIC's earnings have declined by 12.6% per year over the past 5 years.

Accelerating Growth: RIC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: RIC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Food industry (50%).

Return on Equity

High ROE: RIC's Return on Equity (12.2%) is considered low.

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Financial Health

How is Ridley's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

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

Financial Position Analysis

Short Term Liabilities: RIC's short term assets (A$237.0M) exceed its short term liabilities (A$201.2M).

Long Term Liabilities: RIC's short term assets (A$237.0M) exceed its long term liabilities (A$53.5M).

Debt to Equity History and Analysis

Debt Level: RIC's net debt to equity ratio (5.6%) is considered satisfactory.

Reducing Debt: RIC's debt to equity ratio has reduced from 44% to 14.7% over the past 5 years.

Debt Coverage: RIC's debt is well covered by operating cash flow (182.4%).

Interest Coverage: RIC's interest payments on its debt are well covered by EBIT (11.4x coverage).

Balance Sheet

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Dividend

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

Dividend Score

2/6

Dividend Score 2/6

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

1.92%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RIC's dividend (1.92%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.75%).

High Dividend: RIC's dividend (1.92%) is low compared to the top 25% of dividend payers in the Australian market (6.85%).

Stability and Growth of Payments

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

Growing Dividend: RIC's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (46.3%), RIC's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (17.8%), RIC's dividend payments are well covered by cash flows.

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Management

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

2.2yrs

Average management tenure

CEO

Quinton Hildebrand

2.83yrs

Tenure

AU$1,527,061

Compensation

Mr. Quinton Lance Hildebrand, BSc (AgEcon), MBA, LLB (Hons) LLM (NZ) JSD (Cornell, NY)., serves as Chief Executive Officer, Managing Director and Director of Ridley Corporation Limited since August 26, 201...

CEO Compensation Analysis

Compensation vs Market: Quinton's total compensation ($USD1.06M) is about average for companies of similar size in the Australian market ($USD888.65K).

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

Leadership Team

Experienced Management: RIC's management team is considered experienced (2.2 years average tenure).

Board Members

Experienced Board: RIC's board of directors are considered experienced (6.2 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	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30