ASX:NEC

Stock Analysis Report

Nine Entertainment Holdings

Executive Summary

Nine Entertainment Co. Holdings Limited engages in broadcasting and program production businesses across free to air television and metropolitan radio networks in Australia.


Snowflake Analysis

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Nine Entertainment Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NEC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

25.0%

NEC

4.2%

AU Media

13.4%

AU Market


1 Year Return

-39.8%

NEC

-50.3%

AU Media

-18.8%

AU Market

Return vs Industry: NEC exceeded the Australian Media industry which returned -50.5% over the past year.

Return vs Market: NEC underperformed the Australian Market which returned -22.9% over the past year.


Shareholder returns

NECIndustryMarket
7 Day25.0%4.2%13.4%
30 Day-33.8%-42.0%-20.7%
90 Day-41.3%-49.5%-24.4%
1 Year-36.2%-39.8%-46.4%-50.3%-15.2%-18.8%
3 Year-0.7%-16.0%-45.2%-55.4%-2.8%-15.9%
5 Year-30.8%-50.7%-48.6%-64.0%9.3%-15.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Nine Entertainment Holdings 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: NEC (A$1.05) is trading below our estimate of fair value (A$2.7)

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


Price To Earnings Ratio

PE vs Industry: NEC is good value based on its PE Ratio (12.1x) compared to the Media industry average (14.2x).

PE vs Market: NEC is good value based on its PE Ratio (12.1x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: NEC is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: NEC is good value based on its PB Ratio (0.7x) compared to the AU Media industry average (1x).


Next Steps

Future Growth

How is Nine Entertainment Holdings forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

16.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEC's forecast earnings growth (16.8% per year) is above the savings rate (1.1%).

Earnings vs Market: NEC's earnings (16.8% per year) are forecast to grow faster than the Australian market (9.7% per year).

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

Revenue vs Market: NEC's revenue (1.7% per year) is forecast to grow slower than the Australian market (4% per year).

High Growth Revenue: NEC's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NEC's Return on Equity is forecast to be low in 3 years time (8.1%).


Next Steps

Past Performance

How has Nine Entertainment Holdings performed over the past 5 years?

60.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NEC has a large one-off loss of A$54.9M impacting its December 31 2019 financial results.

Growing Profit Margin: NEC's current net profit margins (6.3%) are lower than last year (14.6%).


Past Earnings Growth Analysis

Earnings Trend: NEC's earnings have grown significantly by 60.6% per year over the past 5 years.

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

Earnings vs Industry: NEC had negative earnings growth (-28.9%) over the past year, making it difficult to compare to the Media industry average (-37.7%).


Return on Equity

High ROE: NEC's Return on Equity (5.6%) is considered low.


Next Steps

Financial Health

How is Nine Entertainment Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: NEC's short term assets (A$920.3M) exceed its short term liabilities (A$888.1M).

Long Term Liabilities: NEC's short term assets (A$920.3M) do not cover its long term liabilities (A$941.4M).


Debt to Equity History and Analysis

Debt Level: NEC's debt to equity ratio (20%) is considered satisfactory.

Reducing Debt: NEC's debt to equity ratio has reduced from 31.5% to 20% over the past 5 years.

Debt Coverage: NEC's debt is well covered by operating cash flow (51.1%).

Interest Coverage: NEC's interest payments on its debt are well covered by EBIT (11.6x coverage).


Balance Sheet

Inventory Level: NEC has a low level of unsold assets or inventory.

Debt Coverage by Assets: NEC's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Nine Entertainment Holdings's current dividend yield, its reliability and sustainability?

9.52%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NEC's dividend (9.52%) is higher than the bottom 25% of dividend payers in the Australian market (3.35%).

High Dividend: NEC's dividend (9.52%) is in the top 25% of dividend payers in the Australian market (8.5%)


Stability and Growth of Payments

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

Growing Dividend: NEC's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (115.6%), NEC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NEC's dividends in 3 years are forecast to be covered by earnings (79.9% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Hugh Marks

4.33s

Tenure

AU$3,248,084

Compensation

Mr. Hugh John Marks is a Director at Macquarie Media Limited since October 2019. Mr. Marks serves as the Chief Executive Officer of Media Venture Partners, a media strategy and investment business. Mr. Mar ...


CEO Compensation Analysis

Compensation vs Market: Hugh's total compensation ($USD1.99M) is above average for companies of similar size in the Australian market ($USD1.08M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Hugh Marks
CEO & Executive Director4.33yrsAU$3.25m0.13% A$2.1m
Michael Stephenson
Chief Sales Officer4yrsAU$1.36m0.0088% A$140.4k
Paul Koppelman
Chief Financial Officer0.50yrno datano data
Nola Hodgson
Head of Investor Relationsno datano datano data
Rachel Launders
General Counsel & Company Secretaryno datano datano data
Victoria Buchan
Director of Communicationsno datano datano data
Tom Malone
Managing Director of Radio0.33yrno datano data
Graeme Cassells
Group Financial Controllerno datano datano data

2.3yrs

Average Tenure

Experienced Management: NEC's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hugh Marks
CEO & Executive Director4.33yrsAU$3.25m0.13% A$2.1m
Nicholas Falloon
Independent Non-Executive Deputy Chairman1.25yrsAU$226.21k0.023% A$372.4k
Patrick Newton Allaway
Independent Non-Executive Director1.25yrsAU$157.88k0.0043% A$69.2k
Peter Costello
Independent Non-Executive Chairman4yrsAU$340.00k0.018% A$283.7k
Miyuki Rosen
Independent Non-Executive Director1.25yrsAU$75.52k0.0047% A$75.2k
Samantha Lewis
Non-Executive Independent Director3yrsAU$180.00k0.0035% A$56.4k
Catherine West
Independent Non-Executive Director3.83yrsAU$180.00k0.0024% A$37.6k

3.0yrs

Average Tenure

58yo

Average Age

Experienced Board: NEC's board of directors are considered experienced (3 years average tenure).


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 83.9%.


Top Shareholders

Company Information

Nine Entertainment Co. Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nine Entertainment Co. Holdings Limited
  • Ticker: NEC
  • Exchange: ASX
  • Founded: 1956
  • Industry: Broadcasting
  • Sector: Media
  • Market Cap: AU$1.594b
  • Shares outstanding: 1.70b
  • Website: https://www.nineentertainmentco.com.au

Number of Employees


Location

  • Nine Entertainment Co. Holdings Limited
  • 24 Artarmon Road
  • Willoughby
  • New South Wales
  • 2068
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NECASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 2013
NECCHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 2013
NEEBST (Boerse-Stuttgart)YesOrdinary SharesDEEURDec 2013
NEEBRSE (Berne Stock Exchange)YesOrdinary SharesCHCHFDec 2013

Biography

Nine Entertainment Co. Holdings Limited engages in broadcasting and program production businesses across free to air television and metropolitan radio networks in Australia. It operates through Broadcasting, Digital and Publishing, Domain Group, and Stan segments. The company is involved in the creation and distribution of content. It also provides advertising services on television, digital platforms, and newspapers; newspapers, magazines, and other publications circulation and subscription services; demand video streaming subscription services; and real estate media and technology services. The company offers its services under the Nine Network Television brand, including Channel 9 and 9HD, as well as 9Go!, 9Gem, 9Life, and 9NOW. It also provides its services under Nine digital brand comprising nine.com.au network, an online source of news, sport, entertainment, and lifestyle content; and 9Honey for women. In addition, the company sells Microsoft's suite of advertising products across Australia and New Zealand. Nine Entertainment Co. Holdings Limited was founded in 1956 and is based in Willoughby, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 10:39
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
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.