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S32

South32ASX:S32 Stock Report

Market Cap

AU$15.6b

7D

3.3%

1Y

57.4%

Updated

28 Sep, 2021

Data

Company Financials +
S32 fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance1/6
Financial Health5/6
Dividends2/6

S32 Overview

South32 Limited operates as a diversified metals and mining company in Australia, Southern Africa, North America, and South America.

South32 Competitors

Price History & Performance

Summary of all time highs, changes and price drops for South32
Historical stock prices
Current Share PriceAU$3.40
52 Week HighAU$2.01
52 Week LowAU$3.52
Beta1.09
1 Month Change17.24%
3 Month Change16.04%
1 Year Change57.41%
3 Year Change-13.04%
5 Year Change37.65%
Change since IPO65.85%

Recent News & Updates

Aug 25
We Think South32's (ASX:S32) Solid Earnings Are Understated

We Think South32's (ASX:S32) Solid Earnings Are Understated

South32 Limited's ( ASX:S32 ) solid earnings announcement recently didn't do much to the stock price. We did some...

Aug 19
Investors Could Be Concerned With South32's (ASX:S32) Returns On Capital

Investors Could Be Concerned With South32's (ASX:S32) Returns On Capital

What financial metrics can indicate to us that a company is maturing or even in decline? A business that's potentially...

Shareholder Returns

S32AU Metals and MiningAU Market
7D3.3%1.3%1.5%
1Y57.4%10.3%24.8%

Return vs Industry: S32 exceeded the Australian Metals and Mining industry which returned 10.3% over the past year.

Return vs Market: S32 exceeded the Australian Market which returned 24.8% over the past year.

Price Volatility

Is S32's price volatile compared to industry and market?
S32 volatility
S32 Beta1.09
Industry Beta0.93
Market Beta1

Stable Share Price: S32 is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: S32's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
200013,624Graham Kerrhttps://www.south32.net

South32 Limited operates as a diversified metals and mining company in Australia, Southern Africa, North America, and South America. The company operates through Worsley Alumina, Hillside Aluminium, Mozal Aluminium, Brazil Alumina, Illawarra Metallurgical Coal, Eagle Downs Metallurgical Coal, Australia Manganese, South Africa Managanese, Cerro Matoso, Cannington, Hermosa, and South Africa Energy Coal segments. It has a portfolio of assets producing alumina, aluminum, bauxite, energy and metallurgical coal, manganese ore and alloy, ferronickel, silver, lead, zinc, and other base metals.

South32 Fundamentals Summary

How do South32's earnings and revenue compare to its market cap?
S32 fundamental statistics
Market CapUS$11.39b
Earnings (TTM)US$142.00m
Revenue (TTM)US$5.58b

81.2x

P/E Ratio

2.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
S32 income statement (TTM)
RevenueUS$5.58b
Cost of RevenueUS$2.21b
Gross ProfitUS$3.37b
ExpensesUS$3.23b
EarningsUS$142.00m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Oct 21, 2021

Earnings per share (EPS)0.031
Gross Margin60.38%
Net Profit Margin2.55%
Debt/Equity Ratio5.8%

How did S32 perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

165%

Payout Ratio

Valuation

Is South32 undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: S32 (A$3.4) is trading below our estimate of fair value (A$7.96)

Significantly Below Fair Value: S32 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: S32 is poor value based on its PE Ratio (81.2x) compared to the Australian Metals and Mining industry average (11.8x).

PE vs Market: S32 is poor value based on its PE Ratio (81.2x) compared to the Australian market (19x).


Price to Earnings Growth Ratio

PEG Ratio: S32 is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: S32 is good value based on its PB Ratio (1.3x) compared to the AU Metals and Mining industry average (2.6x).


Future Growth

How is South32 forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

17.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: S32's forecast earnings growth (17% per year) is above the savings rate (1.9%).

Earnings vs Market: S32's earnings (17% per year) are forecast to grow faster than the Australian market (11.4% per year).

High Growth Earnings: S32's earnings are forecast to grow, but not significantly.

Revenue vs Market: S32's revenue (2.1% per year) is forecast to grow slower than the Australian market (5.2% per year).

High Growth Revenue: S32's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: S32's Return on Equity is forecast to be low in 3 years time (11.4%).


Past Performance

How has South32 performed over the past 5 years?

-11.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: S32 has a large one-off loss of $787.0M impacting its June 30 2021 financial results.

Growing Profit Margin: S32's current net profit margins (2.5%) are lower than last year (3.1%).


Past Earnings Growth Analysis

Earnings Trend: S32 has become profitable over the past 5 years, growing earnings by -11.1% per year.

Accelerating Growth: S32's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: S32 had negative earnings growth (-10.1%) over the past year, making it difficult to compare to the Metals and Mining industry average (42.6%).


Return on Equity

High ROE: S32's Return on Equity (1.6%) is considered low.


Financial Health

How is South32's financial position?


Financial Position Analysis

Short Term Liabilities: S32's short term assets ($2.9B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: S32's short term assets ($2.9B) exceed its long term liabilities ($2.8B).


Debt to Equity History and Analysis

Debt Level: S32's debt to equity ratio (5.8%) is considered satisfactory.

Reducing Debt: S32's debt to equity ratio has increased from 3.3% to 5.8% over the past 5 years.

Debt Coverage: S32's debt is well covered by operating cash flow (270.2%).

Interest Coverage: S32's interest payments on its debt are well covered by EBIT (14.6x coverage).


Balance Sheet


Dividend

What is South32 current dividend yield, its reliability and sustainability?

2.79%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: S32's dividend (2.79%) is higher than the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: S32's dividend (2.79%) is low compared to the top 25% of dividend payers in the Australian market (5.48%).


Stability and Growth of Payments

Stable Dividend: S32 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: S32's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (164.6%), S32's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: S32's dividends in 3 years are forecast to be covered by earnings (52.9% payout ratio).


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Graham Kerr (50 yo)

6.92yrs

Tenure

US$4,800,570

Compensation

Mr. Graham Kerr, BBus, FCPA, has been the Chief Executive Officer and Managing Director of South32 Limited since August 2014 and December 9, 2015 respectively. He is responsible for running all facets of t...


CEO Compensation Analysis

Compensation vs Market: Graham's total compensation ($USD4.80M) is above average for companies of similar size in the Australian market ($USD3.55M).

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


Leadership Team

Experienced Management: S32's management team is considered experienced (2.6 years average tenure).


Board Members

Experienced Board: S32's board of directors are considered experienced (6.3 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

South32 Limited's employee growth, exchange listings and data sources


Key Information

  • Name: South32 Limited
  • Ticker: S32
  • Exchange: ASX
  • Founded: 2000
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$15.635b
  • Shares outstanding: 4.65b
  • Website: https://www.south32.net

Number of Employees


Location

  • South32 Limited
  • 108 St Georges Terrace
  • Level 36
  • Perth
  • Western Australia
  • 6000
  • Australia

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/28 08:06
End of Day Share Price2021/09/28 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


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.