ASX:S32

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has South32's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.4%

S32

-3.4%

AU Metals and Mining

0.4%

AU Market


1 Year Return

-34.6%

S32

8.1%

AU Metals and Mining

9.8%

AU Market

Return vs Industry: S32 underperformed the Australian Metals and Mining industry which returned 8.1% over the past year.

Return vs Market: S32 underperformed the Australian Market which returned 9.8% over the past year.


Shareholder returns

S32IndustryMarket
7 Day0.4%-3.4%0.4%
30 Day-11.2%-6.8%-1.1%
90 Day-20.4%-12.0%-0.6%
1 Year-31.9%-34.6%15.6%8.1%16.1%9.8%
3 Year7.8%-5.7%55.8%37.1%36.1%17.9%
5 Yearn/a53.9%19.0%49.4%15.7%

Price Volatility Vs. Market

How volatile is South32's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

19.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: S32 (A$2.46) is trading below our estimate of fair value (A$3.07)

Significantly Undervalued: S32 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: S32 is poor value based on its PE Ratio (21.9x) compared to the Metals and Mining industry average (12.9x).

PE vs Market: S32 is poor value based on its PE Ratio (21.9x) compared to the Australian market (18.2x).


Price to Earnings Growth Ratio

Low PEG Ratio: S32 is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: S32 is good value based on its PB Ratio (0.8x) compared to the AU Metals and Mining industry average (1.5x).


Next Steps

Future Growth

How is South32 forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: S32's forecast earnings growth (13.6% per year) is above the savings rate (2.3%).

Earnings vs Market: S32's earnings (13.6% per year) are forecast to grow faster than the Australian market (10.3% per year).

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

Revenue vs Market: S32's revenue is expected to decline over the next 3 years (-0.7% per year).

High Growth Revenue: S32's revenue is forecast to decline over the next 3 years (-0.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: S32's Return on Equity is forecast to be low in 3 years time (7.1%).


Next Steps

Past Performance

How has South32 performed over the past 5 years?

49.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: S32 has become profitable over the past 5 years, growing earnings by 49.5% 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 (-70.8%) over the past year, making it difficult to compare to the Metals and Mining industry average (1.3%).


Return on Equity

High ROE: S32's Return on Equity (3.8%) is considered low.


Return on Assets

ROA vs Industry: S32's Return on Assets is below or equal to the Metals and Mining industry average last year.


Return on Capital Employed

ROCE Improving: S32 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is South32's financial position?


Financial Position Analysis

Short Term Liabilities: S32's short term assets ($3.4B) exceeds its short term liabilities ($1.7B)

Long Term Liabilities: S32's short term assets (3.4B) exceeds its long term liabilities (2.9B)


Debt to Equity History and Analysis

Debt Level: S32's debt to equity ratio (3.6%) is considered satisfactory

Reducing Debt: S32's debt to equity ratio has reduced from 67.5% to 3.6% over the past 5 years.

Debt Coverage: S32's debt is well covered by operating cash flow (503.3%).

Interest Coverage: S32's interest payments on its debt are well covered by EBIT (315.3x coverage).


Balance Sheet

Inventory Level: S32 has a high level of physical assets or inventory.

Debt Coverage by Assets: S32's debt is covered by short term assets (assets are 9.421050x debt).


Next Steps

Dividend

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

5.70%

Current Dividend Yield


Dividend Yield vs Market

company5.7%marketbottom25%2.4%markettop25%5.6%industryaverage4.9%forecastin3Years4.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: S32's dividend (5.7%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: S32's dividend (5.7%) is in the top 25% of dividend payers in the Australian market (5.59%)

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 3 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (102.5%), 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 well covered by earnings (47.8% payout ratio).


Next Steps

Management

What is the CEO of South32's salary, the management and board of directors tenure and is there insider trading?

1.5yrs

Average management tenure


CEO

Graham Kerr (48yo)

5yrs

Tenure

US$6,979,000

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 ($USD4.78M) is about average for companies of similar size in the Australian market ($USD2.81M).

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


Management Age and Tenure

1.5yrs

Average Tenure

49yo

Average Age

Experienced Management: S32's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

4.4yrs

Average Tenure

63.5yo

Average Age

Experienced Board: S32's board of directors are considered experienced (4.4 years average tenure).


Insider Trading

Insider Buying: S32 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$47,65130 Aug 19
Xolani Mkhwanazi
EntityIndividual
Role
Member of the Board of Directors
Non-Independent Non-Executive Director
Shares18,900
Max PriceUS$2.52
BuyUS$3,453,65615 Jul 19
Schroder Investment Management North America Inc.
EntityCompany
Shares1,102,668
Max PriceUS$3.13
BuyUS$216,370,40015 Jul 19
Schroder Investment Management Limited
EntityCompany
Shares64,461,120
Max PriceUS$3.87
SellUS$11,795,40415 Jul 19
Schroder Investment Management North America Inc.
EntityCompany
Shares3,174,169
Max PriceUS$3.72
SellUS$131,880,80215 Jul 19
Schroder Investment Management Limited
EntityCompany
Shares42,244,608
Max PriceUS$3.67
BuyUS$60,12108 Apr 19
Ntombifuthi Temperance Mtoba
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares15,481
Max PriceUS$3.88
BuyUS$64,12621 Feb 19
Ntombifuthi Temperance Mtoba
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares16,500
Max PriceUS$3.89

Ownership Breakdown


Management Team

  • Peter Finnimore (54yo)

    Chief Marketing Officer

    • Tenure: 2.2yrs
  • Graham Kerr (48yo)

    CEO, MD & Executive Director

    • Tenure: 5yrs
    • Compensation: US$6.98m
  • Alex Volante

    Head of Investor Relations

    • Tenure: 1.5yrs
  • Mike Fraser (54yo)

    Chief Operating Officer

    • Tenure: 1.5yrs
    • Compensation: US$3.43m
  • Nicole Duncan (47yo)

    Chief People & Legal Officer and Company Secretary

    • Tenure: 4.8yrs
  • Paul Harvey (56yo)

    Chief Operating Officer

    • Tenure: 1.5yrs
    • Compensation: US$3.01m
  • Rowena Smith (52yo)

    Chief Sustainability Officer

    • Tenure: 2.2yrs
  • Vanessa Torres (49yo)

    Chief Technology Officer

    • Tenure: 1.2yrs
  • Simon Collins (46yo)

    Chief Development Officer

    • Tenure: 1yrs
  • Katie Tovich (49yo)

    Chief Financial Officer

    • Tenure: 0.4yrs
    • Compensation: US$940.00k

Board Members

  • Keith Rumble (65yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: US$339.00k
  • Karen Wood (63yo)

    Independent Chairman of the Board

    • Tenure: 0.5yrs
    • Compensation: US$376.00k
  • Frank Cooper (63yo)

    Independent Non Executive Director

    • Tenure: 4.4yrs
    • Compensation: US$302.00k
  • Xolani Mkhwanazi (64yo)

    Non-Independent Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: US$349.00k
  • Wayne Osborn (68yo)

    Independent Non-Executive Director

    • Tenure: 4.4yrs
    • Compensation: US$318.00k
  • Futhi Temperance Mtoba (64yo)

    Independent Non-Executive Director

    • Tenure: 4.4yrs
    • Compensation: US$294.00k
  • Graham Kerr (48yo)

    CEO, MD & Executive Director

    • Tenure: 5yrs
    • Compensation: US$6.98m
  • Xiaoling Liu (63yo)

    Independent Non-Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$286.00k

Company Information

South32 Limited's company bio, 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$12.097b
  • Shares outstanding: 4.92b
  • Website: https://www.south32.net

Number of Employees


Location

  • South32 Limited
  • 108 St Georges Terrace
  • Level 47
  • Perth
  • Western Australia
  • 6000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
S32ASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2015
S32JSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARMay 2015
S32LSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 2015
32ZDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2015
S32JSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAAUDMay 2015
S32CHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2015
SHTL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2015
S32LBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 2015
SOUH.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMay 2015

Biography

South32 Limited operates as a diversified metals and mining company primarily in Australia, Southern Africa, and South America. The company has a portfolio of assets producing alumina, aluminum, bauxite, e ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 10:40
End of Day Share Price2019/10/18 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.