ASX:ILU

Stock Analysis Report

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Market Cap

AU$4.1b

Last Updated

2021/08/05 08:05 UTC

Data Sources

Company Financials +

Executive Summary

Iluka Resources Limited engages in the exploration, project development, mining, processing, marketing, and rehabilitation of mineral sands. More Details

Rewards

Trading at 15.7% below our estimate of its fair value

Earnings are forecast to grow 21.65% per year

Became profitable this year

Risk Analysis

No risks detected for ILU from our risk checks.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ILU is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 6% a week.

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


Market Performance


7 Day Return

-3.3%

ILU

-0.09%

AU Metals and Mining

1.1%

AU Market


1 Year Return

-0.9%

ILU

29.1%

AU Metals and Mining

26.8%

AU Market

Return vs Industry: ILU underperformed the Australian Metals and Mining industry which returned 29.1% over the past year.

Return vs Market: ILU underperformed the Australian Market which returned 26.8% over the past year.


Shareholder returns

ILUIndustryMarket
7 Day-3.3%-0.09%1.1%
30 Day11.0%8.0%3.4%
90 Day12.2%6.4%5.7%
1 Year95.5%-0.9%35.7%29.1%31.5%26.8%
3 Year74.5%-15.7%87.9%61.1%35.1%18.7%
5 Year195.4%37.8%173.5%124.4%67.5%35.0%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

15.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ILU (A$9.55) is trading below our estimate of fair value (A$11.32)

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


Price To Earnings Ratio

PE vs Industry: ILU is poor value based on its PE Ratio (38.3x) compared to the Australian Metals and Mining industry average (12.6x).

PE vs Market: ILU is poor value based on its PE Ratio (38.3x) compared to the Australian market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: ILU is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: ILU is overvalued based on its PB Ratio (3.1x) compared to the AU Metals and Mining industry average (2.6x).


Future Growth

How is Iluka Resources forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ILU's forecast earnings growth (21.6% per year) is above the savings rate (1.9%).

Earnings vs Market: ILU's earnings (21.6% per year) are forecast to grow faster than the Australian market (13.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ILU's revenue (5.9% per year) is forecast to grow faster than the Australian market (5.1% per year).

High Growth Revenue: ILU's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ILU's Return on Equity is forecast to be low in 3 years time (19.3%).


Past Performance

How has Iluka Resources performed over the past 5 years?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ILU has high quality earnings.

Growing Profit Margin: ILU became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ILU has become profitable over the past 5 years, growing earnings by 5.9% per year.

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

Earnings vs Industry: ILU has become profitable in the last year, making it difficult to compare its past year earnings growth to the Metals and Mining industry (20.2%).


Return on Equity

High ROE: ILU's Return on Equity (8%) is considered low.


Financial Health

How is Iluka Resources's financial position?


Financial Position Analysis

Short Term Liabilities: ILU's short term assets (A$688.6M) exceed its short term liabilities (A$261.2M).

Long Term Liabilities: ILU's short term assets (A$688.6M) do not cover its long term liabilities (A$810.4M).


Debt to Equity History and Analysis

Debt Level: ILU's debt to equity ratio (2.9%) is considered satisfactory.

Reducing Debt: ILU's debt to equity ratio has reduced from 3.7% to 2.9% over the past 5 years.

Debt Coverage: ILU's debt is well covered by operating cash flow (302.7%).

Interest Coverage: ILU's interest payments on its debt are well covered by EBIT (52.6x coverage).


Balance Sheet


Dividend

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

0.21%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ILU's dividend (0.21%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (1.96%).

High Dividend: ILU's dividend (0.21%) is low compared to the top 25% of dividend payers in the Australian market (4.96%).


Stability and Growth of Payments

Stable Dividend: ILU is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: ILU is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: ILU is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ILU's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Tom Patrick O’Leary (58 yo)

4.92yrs

Tenure

AU$1,338,592

Compensation

Mr. Tom J. P O'Leary, LLB, B.Juris, has been the Chief Executive Officer and Managing Director of Iluka Resources Limited since September 5, 2016. He joined Iluka Resources Limited in 2016. Mr. O'Leary se...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD987.74K) is below average for companies of similar size in the Australian market ($USD1.70M).

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


Leadership Team

Experienced Management: ILU's management team is considered experienced (3 years average tenure).


Board Members

Experienced Board: ILU's board of directors are considered experienced (3.4 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.


Top Shareholders

Company Information

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


Key Information

  • Name: Iluka Resources Limited
  • Ticker: ILU
  • Exchange: ASX
  • Founded: 1954
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$4.134b
  • Shares outstanding: 422.65m
  • Website: https://www.iluka.com

Number of Employees


Location

  • Iluka Resources Limited
  • 240 St Georges Terrace
  • Level 17
  • Perth
  • Western Australia
  • 6000
  • Australia

Listings


Biography

Iluka Resources Limited engages in the exploration, project development, mining, processing, marketing, and rehabilitation of mineral sands. The company operates through Jacinth-Ambrosia/Mid West, Cataby/S...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/05 08:05
End of Day Share Price2021/08/05 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.