ASX:S32

Stock Analysis Report

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Executive Summary

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

Rewards

Trading at 67.6% below our estimate of its fair value

Earnings are forecast to grow 33.64% per year

Risk Analysis

No risks detected for S32 from our risk checks.


Snowflake Analysis

Fair value with moderate growth potential.


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

Stable Share Price: S32 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.5%

S32

-3.7%

AU Metals and Mining

-2.4%

AU Market


1 Year Return

-19.4%

S32

9.6%

AU Metals and Mining

-8.3%

AU Market

Return vs Industry: S32 underperformed the Australian Metals and Mining industry which returned 8.4% over the past year.

Return vs Market: S32 underperformed the Australian Market which returned -8.9% over the past year.


Shareholder returns

S32IndustryMarket
7 Day-4.5%-3.7%-2.4%
30 Day-2.3%-1.7%1.8%
90 Day-2.3%-4.9%1.7%
1 Year-17.7%-19.4%15.4%9.6%-5.0%-8.3%
3 Year-32.2%-39.4%52.7%31.2%14.6%-0.08%
5 Year68.4%43.2%134.1%87.8%41.6%12.1%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: S32 (A$2.12) is trading below our estimate of fair value (A$6.54)

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


Price To Earnings Ratio

PE vs Industry: S32 is unprofitable, so we can't compare its PE Ratio to the AU Metals and Mining industry average.

PE vs Market: S32 is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate S32's PEG Ratio to determine if it is good value.


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 (2.5x).


Next Steps

Future Growth

How is South32 forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

33.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: S32 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.3%).

Earnings vs Market: S32 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: S32's is expected to become profitable in the next 3 years.

Revenue vs Market: S32's revenue (0.9% per year) is forecast to grow slower than the Australian market (4.6% per year).

High Growth Revenue: S32's revenue (0.9% 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 (6.3%).


Next Steps

Past Performance

How has South32 performed over the past 5 years?

40.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: S32 is currently unprofitable.

Growing Profit Margin: S32 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: S32 is unprofitable, but has reduced losses over the past 5 years at a rate of 40.6% per year.

Accelerating Growth: Unable to compare S32's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: S32 is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (22.2%).


Return on Equity

High ROE: S32 has a negative Return on Equity (-0.68%), as it is currently unprofitable.


Next Steps

Financial Health

How is South32's financial position?


Financial Position Analysis

Short Term Liabilities: S32's short term assets ($2.7B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: S32's short term assets ($2.7B) do not cover its long term liabilities ($2.9B).


Debt to Equity History and Analysis

Debt Level: S32's debt to equity ratio (3.8%) is considered satisfactory.

Reducing Debt: S32's debt to equity ratio has increased from 3.7% to 3.8% over the past 5 years.

Debt Coverage: S32's debt is well covered by operating cash flow (373%).

Interest Coverage: S32 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

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

2.05%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: S32's dividend (2.05%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.18%).

High Dividend: S32's dividend (2.05%) is low compared to the top 25% of dividend payers in the Australian market (5.49%).


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 4 years.


Current Payout to Shareholders

Dividend Coverage: S32 is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: S32's dividends in 3 years are forecast to be well covered by earnings (44.6% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Graham Kerr (49 yo)

6yrs

Tenure

US$7,300,000

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 ($USD3.60M) is above average for companies of similar size in the Australian market ($USD2.50M).

Compensation vs Earnings: Graham's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Graham Kerr
CEO, MD & Executive Director6yrsUS$7.30m0.19%
$ 19.7m
Katie Tovich
Chief Financial Officer1.42yrsUS$2.06m0.0049%
$ 509.9k
Mike Fraser
Chief Operating Officer2.5yrsUS$3.67m0.054%
$ 5.6m
Jason Economidis
Joint Chief Operating Officer0.25yrno datano data
Vanessa Torres
Chief Technology Officer2.17yrsno datano data
Alex Volante
Head of Investor Relations2.5yrsno datano data
Nicole Duncan
Chief People & Legal Officer and Company Secretary5.83yrsno datano data
Brendan Harris
Chief Commercial Officer0.75yrUS$2.54m0%
$ 0
Rowena Smith
Chief Sustainability Officer3.17yrsno datano data
Simon Collins
Chief Development Officer2yrsno datano data
Melanie Williams
VP of Legal Corporate & Company Secretary4.17yrsno datano data

2.5yrs

Average Tenure

49.5yo

Average Age

Experienced Management: S32's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Graham Kerr
CEO, MD & Executive Director6yrsUS$7.30m0.19%
$ 19.7m
Keith Rumble
Independent Non-Executive Director5.67yrsUS$342.00k0.0034%
$ 348.6k
Karen Wood
Independent Chairman of the Board1.5yrsUS$617.00k0.0076%
$ 793.9k
Frank Cooper
Independent Non Executive Director5.42yrsUS$283.00k0.0027%
$ 276.8k
Guy Lansdown
Independent Non-Executive Director0.83yrUS$171.00k0.00093%
$ 96.8k
Wayne Osborn
Independent Non-Executive Director5.42yrsUS$342.00k0.0026%
$ 271.6k
Ntombifuthi Temperance Mtoba
Independent Non-Executive Director5.42yrsUS$263.00k0.0014%
$ 149.8k
Xiaoling Liu
Independent Non-Executive Director2.92yrsUS$267.00k0.0013%
$ 130.1k

5.4yrs

Average Tenure

64yo

Average Age

Experienced Board: S32's board of directors are considered experienced (5.4 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

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$10.405b
  • Shares outstanding: 4.82b
  • 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
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, North America, and South America. The company has a portfolio of assets producing alumina, alumi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 10:33
End of Day Share Price2020/10/28 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


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.