Steadfast Group (ASX:SDF) - Share price, News & Analysis

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

SDF (A$5.41) is trading above our estimate of [[fair value]] (A$5.4)

SDF fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	2/6
Past Performance	5/6
Financial Health	5/6
Dividends	2/6

SDF Stock Overview

Steadfast Group Limited provides general insurance brokerage services Australasia, Asia, and Europe.

Rewards

Earnings are forecast to grow 6.67% per year

Earnings grew by 93.7% over the past year

Risk Analysis

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Steadfast Group Competitors

AUB Group

ASX:AUB

AU$1.8b

PSC Insurance Group

ASX:PSI

AU$1.5b

nib holdings

ASX:NHF

AU$3.3b

Medibank Private

ASX:MPL

AU$9.6b

Price History & Performance

Summary of all time highs, changes and price drops for Steadfast Group
Historical stock prices
Current Share Price	AU$5.41
52 Week High	AU$5.50
52 Week Low	AU$4.27
Beta	0.78
1 Month Change	7.56%
3 Month Change	9.96%
1 Year Change	15.35%
3 Year Change	56.36%
5 Year Change	90.49%
Change since IPO	280.99%

Recent News & Updates

Jul 04

With EPS Growth And More, Steadfast Group (ASX:SDF) Makes An Interesting Case

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

	SDF	AU Insurance	AU Market
7D	0%	0.2%	0.5%
1Y	15.4%	-6.0%	-8.8%

Return vs Industry: SDF exceeded the Australian Insurance industry which returned -6% over the past year.

Return vs Market: SDF exceeded the Australian Market which returned -8.8% over the past year.

Price Volatility

Is SDF's price volatile compared to industry and market?
SDF volatility
SDF Average Weekly Movement	2.8%
Insurance Industry Average Movement	4.2%
Market Average Movement	10.5%
10% most volatile stocks in AU Market	17.8%
10% least volatile stocks in AU Market	4.6%

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

Volatility Over Time: SDF's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1996	n/a	Robert Kelly	https://www.steadfast.com.au

Steadfast Group Limited provides general insurance brokerage services Australasia, Asia, and Europe. It also provides insurance underwriting services and related services. The company operates a network of 457 general insurance brokers and 24 underwriting agencies.

Steadfast Group Fundamentals Summary

How do Steadfast Group's earnings and revenue compare to its market cap?
SDF fundamental statistics
Market Cap	AU$5.27b
Earnings (TTM)	AU$174.50m
Revenue (TTM)	AU$1.05b

30.2x

P/E Ratio

5.0x

P/S Ratio

Is SDF overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SDF income statement (TTM)
Revenue	AU$1.05b
Cost of Revenue	AU$546.30m
Gross Profit	AU$508.60m
Other Expenses	AU$334.10m
Earnings	AU$174.50m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 17, 2022

Earnings per share (EPS)	0.18
Gross Margin	48.21%
Net Profit Margin	16.54%
Debt/Equity Ratio	49.5%

How did SDF perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

62%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

0/6

Valuation Score 0/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SDF. This is calculated by dividing SDF's market cap by their current preferred multiple.
What is SDF's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$5.27b

SDF 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	5.8x
Enterprise Value/EBITDA	17.4x
PEG Ratio	4.5x

Price to Earnings Ratio vs Peers

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

SDF PE Ratio vs Peers

The above table shows the PE ratio for SDF vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.1x
AUB AUB Group	23.9x	24.6%	AU$1.8b
PSI PSC Insurance Group	35.8x	15.8%	AU$1.5b
NHF nib holdings	18.6x	10.3%	AU$3.3b
MPL Medibank Private	22x	8.3%	AU$9.6b
SDF Steadfast Group	30.2x	6.7%	AU$5.2b

Price-To-Earnings vs Peers: SDF is expensive based on its Price-To-Earnings Ratio (30.2x) compared to the peer average (25.1x).

Price to Earnings Ratio vs Industry

How does SDF's PE Ratio compare vs other companies in the Global Insurance Industry?

Price-To-Earnings vs Industry: SDF is expensive based on its Price-To-Earnings Ratio (30.2x) compared to the Global Insurance industry average (12x)

Price to Earnings Ratio vs Fair Ratio

What is SDF'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.

SDF PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.2x
Fair PE Ratio	26.4x

Price-To-Earnings vs Fair Ratio: SDF is expensive based on its Price-To-Earnings Ratio (30.2x) compared to the estimated Fair Price-To-Earnings Ratio (26.4x).

Share Price vs Fair Value

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

Below Fair Value: SDF (A$5.41) is trading above our estimate of fair value (A$5.4)

Significantly Below Fair Value: SDF is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Steadfast Group forecast to perform in the next 1 to 3 years based on estimates from 9 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

6.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SDF's forecast earnings growth (6.7% per year) is above the savings rate (1.8%).

Earnings vs Market: SDF's earnings (6.7% per year) are forecast to grow faster than the Australian market (6.2% per year).

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

Revenue vs Market: SDF's revenue (5.8% per year) is forecast to grow slower than the Australian market (6% per year).

High Growth Revenue: SDF's revenue (5.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SDF's Return on Equity is forecast to be low in 3 years time (12.3%).

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Past Performance

How has Steadfast Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

10.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SDF has high quality earnings.

Growing Profit Margin: SDF's current net profit margins (16.5%) are higher than last year (10.2%).

Past Earnings Growth Analysis

Earnings Trend: SDF's earnings have grown by 10.5% per year over the past 5 years.

Accelerating Growth: SDF's earnings growth over the past year (93.7%) exceeds its 5-year average (10.5% per year).

Earnings vs Industry: SDF earnings growth over the past year (93.7%) exceeded the Insurance industry 64.4%.

Return on Equity

High ROE: SDF's Return on Equity (11.2%) is considered low.

Discover strong past performing companies

Financial Health

How is Steadfast 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: SDF's short term assets (A$1.7B) exceed its short term liabilities (A$1.5B).

Long Term Liabilities: SDF's short term assets (A$1.7B) exceed its long term liabilities (A$558.8M).

Debt to Equity History and Analysis

Debt Level: SDF's net debt to equity ratio (37.1%) is considered satisfactory.

Reducing Debt: SDF's debt to equity ratio has increased from 22.6% to 49.5% over the past 5 years.

Debt Coverage: SDF's debt is well covered by operating cash flow (21.5%).

Interest Coverage: SDF's interest payments on its debt are well covered by EBIT (21x coverage).

Balance Sheet

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Dividend

What is Steadfast Group 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
Cash Flow Coverage

2.26%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SDF's dividend (2.26%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.65%).

High Dividend: SDF's dividend (2.26%) is low compared to the top 25% of dividend payers in the Australian market (6.33%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (61.9%), SDF's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (63.8%), SDF's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

9.2yrs

Average management tenure

CEO

Robert Kelly (74 yo)

26.33yrs

Tenure

AU$4,437,736

Compensation

Mr. Robert Bernard Kelly, AM, Co-Founded Steadfast Group Limited and has been its Chief Executive Officer and Managing Director since April 18, 1996. Mr. Kelly has experience in the insurance industry. He...

CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD3.15M) is above average for companies of similar size in the Australian market ($USD2.01M).

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

Leadership Team

Experienced Management: SDF's management team is seasoned and experienced (9.2 years average tenure).

Board Members

Experienced Board: SDF's board of directors are considered experienced (9.3 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: SDF insiders have sold more shares than they have bought in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 12.2%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30