ASX:SCG

Stock Analysis Report

Executive Summary

Scentre Group owns and operates the pre-eminent living centre portfolio in Australia and New Zealand with retail real estate assets under management valued at $56.0 billion and shopping centre ownership interests valued at $38.2 billion.


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.3%

SCG

-2.9%

AU REITs

0.3%

AU Market


1 Year Return

-63.7%

SCG

-36.8%

AU REITs

-22.9%

AU Market

Return vs Industry: SCG underperformed the Australian REITs industry which returned -36.8% over the past year.

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


Shareholder returns

SCGIndustryMarket
7 Day-1.3%-2.9%0.3%
30 Day-57.4%-38.3%-25.3%
90 Day-61.5%-38.7%-29.9%
1 Year-61.5%-63.7%-33.9%-36.8%-19.4%-22.9%
3 Year-60.1%-66.2%-14.1%-26.2%-8.3%-20.8%
5 Year-48.7%-60.6%9.4%-14.9%2.9%-20.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Scentre Group 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: SCG (A$1.48) is trading below our estimate of fair value (A$9.03)

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


Price To Earnings Ratio

PE vs Industry: SCG is good value based on its PE Ratio (6.6x) compared to the REITs industry average (9.2x).

PE vs Market: SCG is good value based on its PE Ratio (6.6x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: SCG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SCG is good value based on its PB Ratio (0.3x) compared to the AU REITs industry average (0.8x).


Next Steps

Future Growth

How is Scentre Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-4.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCG's earnings are forecast to decline over the next 3 years (-4.6% per year).

Earnings vs Market: SCG's earnings are forecast to decline over the next 3 years (-4.6% per year).

High Growth Earnings: SCG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SCG's revenue (3.7% per year) is forecast to grow slower than the Australian market (4% per year).

High Growth Revenue: SCG's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SCG's Return on Equity is forecast to be low in 3 years time (5.9%).


Next Steps

Past Performance

How has Scentre Group performed over the past 5 years?

-0.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SCG has high quality earnings.

Growing Profit Margin: SCG's current net profit margins (45.1%) are lower than last year (86.8%).


Past Earnings Growth Analysis

Earnings Trend: SCG's earnings have declined by -0.9% per year over the past 5 years.

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

Earnings vs Industry: SCG had negative earnings growth (-48.4%) over the past year, making it difficult to compare to the REITs industry average (1.7%).


Return on Equity

High ROE: SCG's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is Scentre Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

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

Debt Coverage by Assets: SCG's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

Asset Level: SCG's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SCG has a sufficient allowance for bad loans.

Low Risk Liabilities: SCG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SCG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SCG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SCG has an appropriate level of bad loans.


Next Steps

Dividend

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

15.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SCG's dividend (15.32%) is higher than the bottom 25% of dividend payers in the Australian market (3.35%).

High Dividend: SCG's dividend (15.32%) is in the top 25% of dividend payers in the Australian market (8.5%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SCG has been paying a dividend for less than 10 years.

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (88.3%), SCG's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCG's dividends in 3 years are forecast to be thoroughly covered by earnings (0.02% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Peter Allen (57yo)

6.17s

Tenure

AU$7,157,781

Compensation

Mr. Peter Kenneth Allen has been the Chief Executive Officer and Executive Director of Scentre Group since 2010 and May 25, 2011 respectively and serves as its Managing Director. Mr. Allen has been Chief E ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD4.39M) is above average for companies of similar size in the Australian market ($USD2.57M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Peter Allen
MD, CEO & Executive Director6.17yrsAU$7.16m0.11% A$8.3m
Elliott C. Rusanow
Chief Financial Officer0.92yrAU$2.08mno data
Richard Webby
Director of Technology0.17yrno datano data
Andrew Clarke
Head of Investor Relationsno datano datano data
Maureen McGrath
General Counsel & Compliance and Secretary of Scentre Group5.75yrsno datano data
Paul Giugni
General Counsel & Secretary5.75yrsno datano data
Janine Frew
Director of Human Resources5.75yrsno datano data
Roy Gruenpeter
General Manager of Developmentno datano datano data
John Yates
Director of Security4.5yrsno datano data

5.8yrs

Average Tenure

Experienced Management: SCG's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Allen
MD, CEO & Executive Director6.17yrsAU$7.16m0.11% A$8.3m
Sarah Carolyn Kay
Independent Non-Executive Director4yrsAU$250.13k0.0011% A$86.1k
Andrew Harmos
Independent Non-Executive Director5.75yrsAU$280.13k0.0021% A$167.4k
Michael Ihlein
Independent Non-Executive Director5.75yrsAU$280.13k0.00093% A$72.8k
Brian Schwartz
Independent Non-Executive Chairman3.83yrsAU$717.50k0.0032% A$250.4k
Aliza Knox
Independent Non-Executive Director4.83yrsAU$245.13k0.0012% A$91.5k
Margaret Seale
Independent Non-Executive Director4yrsAU$285.13k0.0011% A$86.1k
Steven Leigh
Independent Non-Executive Director0.92yrAU$156.01k0.0019% A$145.5k

4.4yrs

Average Tenure

58yo

Average Age

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


Ownership

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


Insider Trading Volume

Insider Buying: SCG 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

Scentre Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Scentre Group
  • Ticker: SCG
  • Exchange: ASX
  • Founded: 2014
  • Industry: Retail REITs
  • Sector: Real Estate
  • Market Cap: AU$7.824b
  • Shares outstanding: 5.18b
  • Website: https://www.scentregroup.com

Number of Employees


Location

  • Scentre Group
  • 85 Castlereagh Street
  • Level 30
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCGASX (Australian Securities Exchange)YesSCG Stapled UnitsAUAUDJun 2014
SCGCHIA (Chi-X Australia)YesSCG Stapled UnitsAUAUDJun 2014
STGP.FOTCPK (Pink Sheets LLC)YesSCG Stapled UnitsUSUSDJun 2014

Biography

Scentre Group owns and operates the pre-eminent living centre portfolio in Australia and New Zealand with retail real estate assets under management valued at $56.0 billion and shopping centre ownership interests valued at $38.2 billion. This comprises 42 Westfield living centres which have strong franchise value and the ability to attract the world’s leading retail brands. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 10:48
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.