ASX:CAJ

Stock Analysis Report

Executive Summary

Capitol Health Limited provides diagnostic imaging and related services to the healthcare market in Australia.

Rewards

Trading at 11% below its fair value

Revenue is forecast to grow 6.06% per year

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of -18.2% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Good value with mediocre balance sheet.


Similar Companies

Sonic Healthcare

ASX:SHL

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

10.9%

CAJ

2.0%

AU Healthcare

0.4%

AU Market


1 Year Return

2.0%

CAJ

29.0%

AU Healthcare

19.5%

AU Market

Return vs Industry: CAJ underperformed the Australian Healthcare industry which returned 27.8% over the past year.

Return vs Market: CAJ underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

CAJIndustryMarket
7 Day10.9%2.0%0.4%
30 Day10.9%5.6%4.4%
90 Day6.3%8.8%5.0%
1 Year6.9%2.0%33.0%29.0%24.9%19.5%
3 Year129.2%112.5%25.3%13.8%38.6%20.0%
5 Year-67.5%-70.3%41.0%21.1%60.1%24.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

2.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CAJ (A$0.23) is trading below our estimate of fair value (A$0.26)

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


Price To Earnings Ratio

PE vs Industry: CAJ is good value based on its PE Ratio (6.6x) compared to the Healthcare industry average (19.3x).

PE vs Market: CAJ is good value based on its PE Ratio (6.6x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: CAJ is good value based on its PB Ratio (1.5x) compared to the AU Healthcare industry average (1.7x).


Next Steps

Future Growth

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

-16.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAJ's earnings are forecast to decline over the next 3 years (-18.2% per year).

Earnings vs Market: CAJ's earnings are forecast to decline over the next 3 years (-18.2% per year).

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

Revenue vs Market: CAJ's revenue (6.1% per year) is forecast to grow faster than the Australian market (3.8% per year).

High Growth Revenue: CAJ's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAJ's Return on Equity is forecast to be low in 3 years time (11.9%).


Next Steps

Past Performance

How has Capitol Health performed over the past 5 years?

-9.8%

Historical annual earnings growth


Earnings and Revenue History

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

Growing Profit Margin: CAJ became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CAJ's earnings have declined by -9.8% per year over the past 5 years.

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

Earnings vs Industry: CAJ has become profitable in the last year, making it difficult to compare its past year earnings growth to the Healthcare industry (1.8%).


Return on Equity

High ROE: CAJ's Return on Equity (23.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Capitol Health's financial position?


Financial Position Analysis

Short Term Liabilities: CAJ's short term assets (A$12.2M) do not cover its short term liabilities (A$24.6M).

Long Term Liabilities: CAJ's short term assets (A$12.2M) do not cover its long term liabilities (A$47.9M).


Debt to Equity History and Analysis

Debt Level: CAJ's debt to equity ratio (33.5%) is considered satisfactory.

Reducing Debt: CAJ's debt to equity ratio has increased from 16.7% to 33.5% over the past 5 years.

Debt Coverage: CAJ's debt is well covered by operating cash flow (47.3%).

Interest Coverage: CAJ's interest payments on its debt are well covered by EBIT (10.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: CAJ's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

3.92%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.3%markettop25%5.5%industryaverage2.6%forecastin3Years4.6%

Current dividend yield vs market & industry

Notable Dividend: CAJ's dividend (4.35%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: CAJ's dividend (4.35%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

Stable Dividend: CAJ has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: CAJ's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.6%), CAJ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CAJ's dividends in 3 years are forecast to be covered by earnings (67.7% payout ratio).


Next Steps

Management

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

1.0yrs

Average management tenure


CEO

Justin Walter 0

0.5yrs

Tenure

AU$390,372

Compensation

Mr. Justin Samuel Walter, MPH (JCU) has been the Chief Executive Officer, Managing Director and a Director at Capitol Health Limited since July 1, 2019 and was its Chief Operating Officer since 2019 until  ...


CEO Compensation Analysis

Compensation vs Market: Justin's total compensation ($USD269.41K) is about average for companies of similar size in the Australian market ($USD262.68K).

Compensation vs Earnings: Insufficient data to compare Justin's compensation with company performance.


Management Age and Tenure

1.0yrs

Average Tenure

Experienced Management: CAJ's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

4.1yrs

Average Tenure

Experienced Board: CAJ's board of directors are considered experienced (4.1 years average tenure).


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

SellAU$1,606,29405 Dec 19
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Regal Funds Management Pty Limited
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BuyAU$1,953,16221 Jun 19
Australian Ethical Investment Ltd
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BuyAU$216,44704 Jun 19
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Lennox Capital Partners
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Shares7,486,301
Max PriceAU$0.25
BuyAU$48,75005 Mar 19
Richard Loveridge
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares250,000
Max PriceAU$0.19
BuyAU$740,16001 Mar 19
Microequities Asset Management Pty Limited
EntityCompany
Shares4,353,885
Max PriceAU$0.17
BuyAU$2,370,88328 Feb 19
Australian Ethical Investment Ltd
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Shares11,901,934
Max PriceAU$0.26
BuyAU$2,785,36012 Feb 19
Challenger Limited
EntityCompany
Shares10,395,023
Max PriceAU$0.27

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Melanie Jaye Leydin (46yo)

    Company Secretary

    • Tenure: 2.4yrs
  • Marcell Judkins

    Chief Financial Officer

    • Tenure: 1yrs
    • Compensation: AU$335.49k
  • Justin Walter

    CEO, MD & Director

    • Tenure: 0.5yrs
    • Compensation: AU$390.37k

Board Members

  • Andrew Demetriou

    Chairman

    • Tenure: 5.2yrs
    • Compensation: AU$260.00k
  • Andrew Harrison (48yo)

    Non-Executive Director

    • Tenure: 14.1yrs
    • Compensation: AU$965.43k
  • Justin Walter

    CEO, MD & Director

    • Tenure: 0.5yrs
    • Compensation: AU$390.37k
  • Nicole Sheffield

    Non-Executive Director

    • Tenure: 4.1yrs
    • Compensation: AU$100.00k
  • Richard Loveridge

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: AU$100.00k

Company Information

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


Key Information

  • Name: Capitol Health Limited
  • Ticker: CAJ
  • Exchange: ASX
  • Founded:
  • Industry: Health Care Services
  • Sector: Healthcare
  • Market Cap: AU$195.942m
  • Shares outstanding: 768.40m
  • Website: https://www.capitolhealth.com.au

Location

  • Capitol Health Limited
  • PO Box 836
  • Port Melbourne
  • Melbourne
  • Victoria
  • 3207
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CAJASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2006
CAJCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2006
D4IDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2006

Biography

Capitol Health Limited provides diagnostic imaging and related services to the healthcare market in Australia. The company owns and operates clinics in Victoria, Tasmania, and Western Australia. It offers a range of diagnostic imaging services, including general x-ray, magnetic resonance imaging, ultrasound, mammography, Doppler, orthopantomogram, echocardiography, computed tomography, CT angiography, cone beam CT, nuclear medicine, bone densitometry, and fluoroscopy. The company is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/25 10:37
End of Day Share Price2020/01/24 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.