ASX:HVN

Stock Analysis Report

Harvey Norman Holdings

Executive Summary

Harvey Norman Holdings Limited grants franchises to independent franchisees.

Rewards

Trading at 30.3% below its fair value

Revenue is forecast to grow 15.03% per year

Earnings grew by 7.2% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -2.1% per year for the next 3 years

Dividend of 7.88% is not well covered by earnings or forecast to be in the next 3 years

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.9%

HVN

-0.4%

AU Multiline Retail

0.3%

AU Market


1 Year Return

30.1%

HVN

30.3%

AU Multiline Retail

17.3%

AU Market

Return vs Industry: HVN matched the Australian Multiline Retail industry which returned 30.3% over the past year.

Return vs Market: HVN exceeded the Australian Market which returned 17.3% over the past year.


Shareholder returns

HVNIndustryMarket
7 Day-1.9%-0.4%0.3%
30 Day-0.2%-1.1%-1.0%
90 Day-6.1%2.6%-0.1%
1 Year44.4%30.1%41.2%30.3%23.1%17.3%
3 Year10.1%-15.7%52.3%-4.1%36.2%17.5%
5 Year79.7%23.2%77.8%0.8%61.4%25.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Harvey Norman Holdings undervalued compared to its fair value and its price relative to the market?

30.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HVN (A$4.19) is trading below our estimate of fair value (A$6.01)

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


Price To Earnings Ratio

PE vs Industry: HVN is good value based on its PE Ratio (12.1x) compared to the Multiline Retail industry average (17.7x).

PE vs Market: HVN is good value based on its PE Ratio (12.1x) compared to the Australian market (18.3x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: HVN is overvalued based on its PB Ratio (1.6x) compared to the XO Multiline Retail industry average (1.6x).


Next Steps

Future Growth

How is Harvey Norman Holdings forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HVN's earnings are forecast to decline over the next 3 years (-2.1% per year).

Earnings vs Market: HVN's earnings are forecast to decline over the next 3 years (-2.1% per year).

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

Revenue vs Market: HVN's revenue (15% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: HVN's revenue (15% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HVN's Return on Equity is forecast to be low in 3 years time (11.3%).


Next Steps

Past Performance

How has Harvey Norman Holdings performed over the past 5 years?

11.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HVN has high quality earnings.

Growing Profit Margin: HVN's current net profit margins (18%) are lower than last year (18.8%).


Past Earnings Growth Analysis

Earnings Trend: HVN's earnings have grown by 11.2% per year over the past 5 years.

Accelerating Growth: HVN's earnings growth over the past year (7.2%) is below its 5-year average (11.2% per year).

Earnings vs Industry: HVN earnings growth over the past year (7.2%) exceeded the Multiline Retail industry -1.9%.


Return on Equity

High ROE: HVN's Return on Equity (12.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Harvey Norman Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: HVN's short term assets (A$1.5B) exceed its short term liabilities (A$899.1M).

Long Term Liabilities: HVN's short term assets (A$1.5B) exceed its long term liabilities (A$701.8M).


Debt to Equity History and Analysis

Debt Level: HVN's debt to equity ratio (26.2%) is considered satisfactory.

Reducing Debt: HVN's debt to equity ratio has reduced from 28.4% to 26.2% over the past 5 years.

Debt Coverage: HVN's debt is well covered by operating cash flow (44.5%).

Interest Coverage: HVN earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

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

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


Next Steps

Dividend

What is Harvey Norman Holdings's current dividend yield, its reliability and sustainability?

7.88%

Current Dividend Yield


Dividend Yield vs Market

company7.9%marketbottom25%2.4%markettop25%5.6%industryaverage2.6%forecastin3Years6.2%

Current dividend yield vs market & industry

Notable Dividend: HVN's dividend (7.88%) is higher than the bottom 25% of dividend payers in the Australian market (2.42%).

High Dividend: HVN's dividend (7.88%) is in the top 25% of dividend payers in the Australian market (5.56%)


Stability and Growth of Payments

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

Growing Dividend: HVN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (95.1%), HVN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HVN's dividends in 3 years are not forecast to be well covered by earnings (91.6% payout ratio).


Next Steps

Management

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

13.7yrs

Average management tenure


CEO

Katie Page (62yo)

20.8yrs

Tenure

AU$3,032,031

Compensation

Ms. Kay Lesley Harvey Page, also known as Katie, has been the Chief Executive Officer and Managing Director of Harvey Norman Holdings Limited since February 1999 and has overall executive responsibility fo ...


CEO Compensation Analysis

Compensation vs Market: Katie's total compensation ($USD2.09M) is about average for companies of similar size in the Australian market ($USD2.26M).

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


Management Age and Tenure

13.7yrs

Average Tenure

59yo

Average Age

Experienced Management: HVN's management team is seasoned and experienced (13.7 years average tenure).


Board Age and Tenure

17.7yrs

Average Tenure

59yo

Average Age

Experienced Board: HVN's board of directors are seasoned and experienced ( 17.7 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

BuyAU$24,05403 Sep 19
Kay Lesley Page
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares5,442
Max PriceAU$4.42

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.6%.


Management Team

  • Katie Page (62yo)

    CEO & Executive Director

    • Tenure: 20.8yrs
    • Compensation: AU$3.03m
  • John Slack-Smith (50yo)

    Executive Director & COO

    • Tenure: 18.8yrs
    • Compensation: AU$2.04m
  • Gerry Harvey (80yo)

    Co-Founder

    • Tenure: 32.9yrs
    • Compensation: AU$858.12k
  • Chris Mentis (53yo)

    Executive Director

    • Tenure: 12.3yrs
    • Compensation: AU$1.64m
  • Martin Anderson

    General Manager of Advertising

    • Tenure: 0yrs
    • Compensation: AU$354.99k
  • David Ackery (59yo)

    Executive Director

    • Tenure: 14yrs
    • Compensation: AU$2.04m
  • Thomas Scott

    General Manager of Property

    • Tenure: 13.7yrs
    • Compensation: AU$604.43k
  • Gordon Dingwall

    Chief Information Officer

    • Tenure: 8yrs
    • Compensation: AU$523.24k
  • Frank Robinson

    General Manager of Technology & Entertainment

    • Tenure: 2.3yrs
    • Compensation: AU$528.12k
  • Lachlan Roach

    General Manager of Home Appliances

    • Tenure: 2.2yrs
    • Compensation: AU$439.27k

Board Members

  • Chris Brown (69yo)

    Non-Executive Director

    • Tenure: 32.9yrs
    • Compensation: AU$160.00k
  • Ken Gunderson-Briggs (58yo)

    Non-Executive Independent Director

    • Tenure: 16.5yrs
    • Compensation: AU$272.45k
  • Michael Harvey (54yo)

    Non-Executive Director

    • Tenure: 26.9yrs
    • Compensation: AU$60.00k
  • Katie Page (62yo)

    CEO & Executive Director

    • Tenure: 20.8yrs
    • Compensation: AU$3.03m
  • John Slack-Smith (50yo)

    Executive Director & COO

    • Tenure: 18.8yrs
    • Compensation: AU$2.04m
  • Gerry Harvey (80yo)

    Co-Founder

    • Tenure: 32.9yrs
    • Compensation: AU$858.12k
  • Chris Mentis (53yo)

    Executive Director

    • Tenure: 12.3yrs
    • Compensation: AU$1.64m
  • Graham Paton (74yo)

    Senior Independent Director

    • Tenure: 4yrs
    • Compensation: AU$160.00k
  • David Ackery (59yo)

    Executive Director

    • Tenure: 14yrs
    • Compensation: AU$2.04m
  • Maurice Craven

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: AU$38.13k

Company Information

Harvey Norman Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Harvey Norman Holdings Limited
  • Ticker: HVN
  • Exchange: ASX
  • Founded: 1982
  • Industry: General Merchandise Stores
  • Sector: Retail
  • Market Cap: AU$5.221b
  • Shares outstanding: 1.25b
  • Website: https://www.harveynormanholdings.com.au

Number of Employees


Location

  • Harvey Norman Holdings Limited
  • A1 Richmond Road
  • Homebush West
  • New South Wales
  • 2140
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HNNDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
HVNASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
HVNCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
HNOR.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDDec 2008

Biography

Harvey Norman Holdings Limited grants franchises to independent franchisees. Its franchisees sell products in various categories, including electrical goods, furniture, computers and communications, beddin ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 10:33
End of Day Share Price2019/12/13 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.