ASX:API

Stock Analysis Report

Australian Pharmaceutical Industries

Executive Summary

Australian Pharmaceutical Industries Limited engages in the wholesale distribution of pharmaceutical, medical, health, beauty, and lifestyle products to pharmacies primarily in Australia.


Snowflake Analysis

Undervalued with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Australian Pharmaceutical Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-7.2%

API

1.1%

AU Healthcare

4.9%

AU Market


1 Year Return

-21.1%

API

-10.9%

AU Healthcare

-14.2%

AU Market

Return vs Industry: API underperformed the Australian Healthcare industry which returned -13.1% over the past year.

Return vs Market: API underperformed the Australian Market which returned -17.5% over the past year.


Shareholder returns

APIIndustryMarket
7 Day-7.2%1.1%4.9%
30 Day0.9%-15.7%-8.9%
90 Day-15.3%-23.0%-22.7%
1 Year-16.6%-21.1%-8.2%-10.9%-10.3%-14.2%
3 Year-35.6%-44.2%-8.9%-17.3%2.6%-11.6%
5 Year-13.0%-28.8%-7.4%-20.9%13.9%-11.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Australian Pharmaceutical Industries undervalued compared to its fair value and its price relative to the market?

33.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: API (A$1.16) is trading below our estimate of fair value (A$1.74)

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


Price To Earnings Ratio

PE vs Industry: API is good value based on its PE Ratio (10.4x) compared to the Healthcare industry average (13.3x).

PE vs Market: API is good value based on its PE Ratio (10.4x) compared to the Australian market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: API's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: API is good value based on its PB Ratio (1.1x) compared to the AU Healthcare industry average (1.3x).


Next Steps

Future Growth

How is Australian Pharmaceutical Industries forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-2.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: API's earnings are forecast to decline over the next 3 years (-2.8% per year).

Earnings vs Market: API's earnings are forecast to decline over the next 3 years (-2.8% per year).

High Growth Earnings: API's earnings are forecast to decline over the next 3 years.

Revenue vs Market: API's revenue (0.4% per year) is forecast to grow slower than the Australian market (4% per year).

High Growth Revenue: API's revenue (0.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: API's Return on Equity is forecast to be low in 3 years time (9.1%).


Next Steps

Past Performance

How has Australian Pharmaceutical Industries performed over the past 5 years?

23.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: API has high quality earnings.

Growing Profit Margin: API's current net profit margins (1.4%) are higher than last year (1.2%).


Past Earnings Growth Analysis

Earnings Trend: API has become profitable over the past 5 years, growing earnings by 23.2% per year.

Accelerating Growth: API's earnings growth over the past year (14.7%) is below its 5-year average (23.2% per year).

Earnings vs Industry: API earnings growth over the past year (14.7%) exceeded the Healthcare industry 8.7%.


Return on Equity

High ROE: API's Return on Equity (10.8%) is considered low.


Next Steps

Financial Health

How is Australian Pharmaceutical Industries's financial position?


Financial Position Analysis

Short Term Liabilities: API's short term assets (A$1.1B) exceed its short term liabilities (A$887.5M).

Long Term Liabilities: API's short term assets (A$1.1B) exceed its long term liabilities (A$255.4M).


Debt to Equity History and Analysis

Debt Level: API's debt to equity ratio (43.8%) is considered high.

Reducing Debt: API's debt to equity ratio has increased from 24.7% to 43.8% over the past 5 years.

Debt Coverage: API's debt is not well covered by operating cash flow (5.1%).

Interest Coverage: API's interest payments on its debt are well covered by EBIT (14x coverage).


Balance Sheet


Next Steps

Dividend

What is Australian Pharmaceutical Industries's current dividend yield, its reliability and sustainability?

6.68%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: API's dividend (6.68%) is higher than the bottom 25% of dividend payers in the Australian market (2.99%).

High Dividend: API's dividend (6.68%) is low compared to the top 25% of dividend payers in the Australian market (7.83%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (69.3%), API's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: API's dividends in 3 years are forecast to be covered by earnings (75.6% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Richard Vincent

3.17s

Tenure

AU$1,274,237

Compensation

Mr. Richard C. Vincent, B.Bus, (Accountancy), CPA, has been Chief Executive Officer, Managing Director and Executive Director at Australian Pharmaceutical Industries Limited since February 15, 2017. Mr. Vi ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD793.87K) is about average for companies of similar size in the Australian market ($USD760.49K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Richard Vincent
MD, CEO & Executive Director3.17yrsAU$1.27m0.091% A$531.2k
Peter Mendo
Chief Financial Officer5.25yrsAU$554.57k0.0094% A$55.3k
Dean Matthews
Chief Information Officer3.33yrsno datano data
Anne Mustow
General Counsel & Company Secretary0.75yrno datano data
Stephen Arthurson
General Manager of Peopleno dataAU$435.21kno data
D. Glance
NSW State Managerno dataAU$251.36kno data

3.3yrs

Average Tenure

Experienced Management: API's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Vincent
MD, CEO & Executive Director3.17yrsAU$1.27m0.091% A$531.2k
Robert Millner
Non-Executive Director19.92yrsAU$110.99k0.36% A$2.1m
Kenneth Gunderson-Briggs
Independent Non-Executive Director5.92yrsAU$178.07k0.0061% A$35.7k
Mark Smith
Non-Executive Chairman of the Board2.25yrsAU$243.06k0.076% A$446.3k
Lee Ausburn
Independent Non-Executive Director11.5yrsAU$110.99k0.017% A$99.2k
Jennifer Mitchell MacDonald
Independent Non-Executive Director2.42yrsAU$110.99k0.0071% A$41.6k

4.5yrs

Average Tenure

64yo

Average Age

Experienced Board: API's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: API 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.


Top Shareholders

Company Information

Australian Pharmaceutical Industries Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Australian Pharmaceutical Industries Limited
  • Ticker: API
  • Exchange: ASX
  • Founded: 1910
  • Industry: Health Care Distributors
  • Sector: Healthcare
  • Market Cap: AU$586.261m
  • Shares outstanding: 492.66m
  • Website: https://www.api.net.au

Location

  • Australian Pharmaceutical Industries Limited
  • 250 Camberwell Road
  • Level 5
  • Camberwell
  • Victoria
  • 3124
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
APIASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 1997
APICHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 1997

Biography

Australian Pharmaceutical Industries Limited engages in the wholesale distribution of pharmaceutical, medical, health, beauty, and lifestyle products to pharmacies primarily in Australia. The company also retails health and beauty products to consumers; and manufactures and distributes pharmaceutical and toiletry goods to New Zealand, Australian, and Asian markets, as well as provides cosmetic products and procedures. In addition, its services include wholesale product delivery, retail services, marketing programs, and business advisory services. The company markets its products and services under the Soul Pattinson Chemist, Pharmacist Advice, Club Premium, and Pharmacy Best Buys brand names, as well as through 488 Priceline and Priceline Pharmacy franchise stores, and company owned Priceline stores. Australian Pharmaceutical Industries Limited was founded in 1910 and is based in Camberwell, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/09 10:32
End of Day Share Price2020/04/09 00:00
Earnings2019/08/31
Annual Earnings2019/08/31


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.