ASX:SGP

Stock Analysis Report

Executive Summary

Stockland (ASX: SGP) was founded in 1952 and has grown to become one of Australia’s largest diversified property groups – owning, developing and managing a large portfolio of shopping centres, residential communities, workplace and logistic assets and retirement living villages.

Rewards

Trading at 28.8% below its fair value

Earnings are forecast to grow 22.13% per year

Risk Analysis

Dividend of 5.69% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (10.9%) are lower than last year (36%)



Snowflake Analysis

Moderate growth potential second-rate dividend payer.


Similar Companies

Abacus Property Group

ASX:ABP

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

3.3%

SGP

2.6%

AU REITs

2.0%

AU Market


1 Year Return

35.4%

SGP

17.0%

AU REITs

19.8%

AU Market

Return vs Industry: SGP exceeded the Australian REITs industry which returned 14.7% over the past year.

Return vs Market: SGP exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

SGPIndustryMarket
7 Day3.3%2.6%2.0%
30 Day3.9%3.9%3.3%
90 Day8.4%2.8%5.8%
1 Year43.9%35.4%22.6%17.0%25.2%19.8%
3 Year40.9%16.8%54.0%31.9%39.6%20.9%
5 Year55.4%15.2%87.8%46.1%61.8%25.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

28.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SGP (A$4.96) is trading below our estimate of fair value (A$6.97)

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


Price To Earnings Ratio

PE vs Industry: SGP is poor value based on its PE Ratio (38.3x) compared to the REITs industry average (15.8x).

PE vs Market: SGP is poor value based on its PE Ratio (38.3x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SGP is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: SGP is overvalued based on its PB Ratio (1.2x) compared to the AU REITs industry average (1.2x).


Next Steps

Future Growth

How is Stockland forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

22.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGP's forecast earnings growth (22.1% per year) is above the savings rate (1.1%).

Earnings vs Market: SGP's earnings (22.1% per year) are forecast to grow faster than the Australian market (9.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SGP's revenue (1.5% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: SGP's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SGP's Return on Equity is forecast to be low in 3 years time (8.3%).


Next Steps

Past Performance

How has Stockland performed over the past 5 years?

-0.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SGP has a large one-off loss of A$315.0M impacting its June 30 2019 financial results.

Growing Profit Margin: SGP's current net profit margins (10.9%) are lower than last year (36%).


Past Earnings Growth Analysis

Earnings Trend: SGP's earnings have declined by -0.5% per year over the past 5 years.

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

Earnings vs Industry: SGP had negative earnings growth (-69.7%) over the past year, making it difficult to compare to the REITs industry average (-16.4%).


Return on Equity

High ROE: SGP's Return on Equity (3.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Stockland'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: SGP has a low level of unsold assets or inventory.

Debt Coverage by Assets: SGP's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

5.63%

Current Dividend Yield


Dividend Yield vs Market

company5.6%marketbottom25%2.3%markettop25%5.4%industryaverage4.3%forecastin3Years5.7%

Current dividend yield vs market & industry

Notable Dividend: SGP's dividend (5.69%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: SGP's dividend (5.69%) is in the top 25% of dividend payers in the Australian market (5.47%)


Stability and Growth of Payments

Stable Dividend: SGP's dividend payments have been volatile in the past 10 years.

Growing Dividend: SGP's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (165.7%), SGP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SGP's dividends in 3 years are forecast to be thoroughly covered by earnings (0.03% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Mark Steinert 0

7yrs

Tenure

AU$3,406,427

Compensation

Mr. Mark Andrew Steinert, BAppSc, G Dip App Fin & Inv (Sec Inst), F Fin, AAPI has been Managing Director and Chief Executive Officer of Stockland since January 29, 2013 and has been its Director since Janu ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD2.35M) is about average for companies of similar size in the Australian market ($USD2.84M).

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


Management Age and Tenure

5.8yrs

Average Tenure

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


Board Age and Tenure

5.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: SGP's board of directors are considered experienced (5.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$9,368,29821 Nov 19
Legg Mason, Inc.
EntityCompany
Shares2,032,207
Max PriceAU$4.93
BuyAU$9,611,52721 Nov 19
Legg Mason, Inc.
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Shares2,132,995
Max PriceAU$4.51
BuyAU$613,40516 Oct 19
Mark Steinert
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares134,145
Max PriceAU$4.57
SellAU$3,184,28406 Aug 19
Legg Mason, Inc.
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Shares669,140
Max PriceAU$4.78
BuyAU$4,483,82606 Aug 19
Legg Mason, Inc.
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Max PriceAU$4.74
SellAU$2,656,04302 Aug 19
Legg Mason, Inc.
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Max PriceAU$4.67
BuyAU$4,384,22102 Aug 19
Legg Mason, Inc.
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Shares951,271
Max PriceAU$4.68
SellAU$8,596,33724 Jul 19
Legg Mason, Inc.
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Shares1,920,266
Max PriceAU$4.48
BuyAU$5,40524 Jul 19
Brandywine Global Investment Management, LLC
EntityCompany
Shares1,260
Max PriceAU$4.29
BuyAU$4,666,48624 Jul 19
Legg Mason, Inc.
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Shares1,060,029
Max PriceAU$4.40
BuyAU$86427 Jun 19
Brandywine Global Investment Management, LLC
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Shares240
Max PriceAU$3.60
SellAU$16,546,59527 Jun 19
Legg Mason, Inc.
EntityCompany
Shares3,973,015
Max PriceAU$4.16
BuyAU$215,72227 Jun 19
QS Investors LLC
EntityCompany
Shares56,769
Max PriceAU$3.80
BuyAU$22,261,95627 Jun 19
Legg Mason, Inc.
EntityCompany
Shares5,048,289
Max PriceAU$4.41
SellAU$5,628,00716 Apr 19
Legg Mason, Inc.
EntityCompany
Shares1,449,198
Max PriceAU$3.93
BuyAU$39,73616 Apr 19
Legg Mason, Inc.
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Shares10,302
Max PriceAU$3.87
SellAU$8,354,12802 Apr 19
Legg Mason, Inc.
EntityCompany
Shares2,202,669
Max PriceAU$3.79
BuyAU$13,505,85202 Apr 19
Legg Mason, Inc.
EntityCompany
Shares3,591,472
Max PriceAU$3.76
BuyAU$35,84005 Mar 19
Mark Steinert
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares10,000
Max PriceAU$3.58
BuyAU$14,32005 Mar 19
Mark Steinert
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares4,000
Max PriceAU$3.58

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Mark Steinert

    MD, CEO & Executive Director

    • Tenure: 7yrs
    • Compensation: AU$3.41m
  • Tiernan O’Rourke

    Chief Financial Officer

    • Tenure: 6.3yrs
    • Compensation: AU$1.77m
  • Antoinette Plater

    Senior Manager of Investor Relations

    • Andrew Whitson

      Group Executive & CEO of Stockland Communities

      • Tenure: 6.6yrs
      • Compensation: AU$1.67m
    • Darren Rehn

      Group Executive & Chief Investment Officer

      • Tenure: 6.3yrs
      • Compensation: AU$1.94m
    • Katherine Grace (44yo)

      General Counsel & Company Secretary

      • Tenure: 5.4yrs
      • Compensation: AU$1.23m
    • Robyn Elliott

      Chief Innovation

      • Tenure: 1.8yrs
      • Compensation: AU$588.46k
    • Larissa Webster

      Senior Manager of Media Relations & Internal Communications

      • Louise Mason

        Group Executive & CEO of Commercial Property

        • Tenure: 1.6yrs
        • Compensation: AU$1.32m
      • Karen Lonergan

        Group Executive of People & Culture

        • Tenure: 0.8yrs

      Board Members

      • David A. Lockhart (75yo)

        Member of the Advisory Board

        • Tenure: 11.6yrs
      • Margaret Ford (60yo)

        Member of the Advisory Board

        • Tenure: 11.6yrs
      • Barry Neil (70yo)

        Non-Executive Director

        • Tenure: 12.3yrs
        • Compensation: AU$227.70k
      • Christine O’Reilly (58yo)

        Non-Executive Director

        • Tenure: 1.4yrs
        • Compensation: AU$186.27k
      • Tom Pockett (61yo)

        Non-Executive Chairman

        • Tenure: 3.3yrs
        • Compensation: AU$500.00k
      • Ray Greenshields (72yo)

        Member of the Advisory Board

        • Tenure: 11.6yrs
      • Mark Steinert

        MD, CEO & Executive Director

        • Tenure: 7yrs
        • Compensation: AU$3.41m
      • Andrew Stevens

        Non-Executive Director

        • Tenure: 2.5yrs
        • Compensation: AU$195.00k
      • Stephen Newton (66yo)

        Non-Executive Director

        • Tenure: 3.6yrs
        • Compensation: AU$281.25k
      • Melinda Conrad (50yo)

        Non Executive Director

        • Tenure: 1.7yrs
        • Compensation: AU$221.98k

      Company Information

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


      Key Information

      • Name: Stockland
      • Ticker: SGP
      • Exchange: ASX
      • Founded: 1952
      • Industry: Diversified REITs
      • Sector: Real Estate
      • Market Cap: AU$11.912b
      • Shares outstanding: 2.38b
      • Website: https://www.stockland.com.au

      Number of Employees


      Location

      • Stockland
      • 133 Castlereagh Street
      • Level 25
      • Sydney
      • New South Wales
      • 2000
      • Australia

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      SGPASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDJan 1992
      STKA.FOTCPK (Pink Sheets LLC)YesStapled SecuritiesUSUSDJan 1992
      LN1DB (Deutsche Boerse AG)YesStapled SecuritiesDEEURJan 1992
      SGPCHIA (Chi-X Australia)YesStapled SecuritiesAUAUDJan 1992

      Biography

      Stockland (ASX: SGP) was founded in 1952 and has grown to become one of Australia’s largest diversified property groups – owning, developing and managing a large portfolio of shopping centres, residential communities, workplace and logistic assets and retirement living villages. Stockland is rated as the most sustainable real estate company in the world in 2018 by the Dow Jones Sustainability World Index (DJSI). Stockland is also an Employer of Choice for Gender Equality, as recognised by the Workplace Gender Equality Agency. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 10:33
      End of Day Share Price2020/01/17 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.