ASX:SUL

Stock Analysis Report

Super Retail Group

Executive Summary

Super Retail Group Limited operates as a retailer of auto, sports, and outdoor leisure in Australia, New Zealand, and China.

Rewards

Trading at 36.1% below its fair value

Earnings are forecast to grow 6.58% per year

Earnings grew by 8.7% over the past year

Pays a high and reliable dividend of 4.81%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Undervalued with solid track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.2%

SUL

-1.5%

AU Specialty Retail

0.4%

AU Market


1 Year Return

26.2%

SUL

44.8%

AU Specialty Retail

19.5%

AU Market

Return vs Industry: SUL underperformed the Australian Specialty Retail industry which returned 57.6% over the past year.

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


Shareholder returns

SULIndustryMarket
7 Day-3.2%-1.5%0.4%
30 Day-9.1%-1.0%4.4%
90 Day1.5%0.08%5.0%
1 Year33.6%26.2%51.4%44.8%24.9%19.5%
3 Year12.7%-4.7%31.0%14.4%38.6%19.9%
5 Year39.6%8.2%89.8%53.5%60.0%24.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Super Retail Group undervalued compared to its fair value and its price relative to the market?

38.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SUL (A$10.39) is trading below our estimate of fair value (A$16.25)

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


Price To Earnings Ratio

PE vs Industry: SUL is good value based on its PE Ratio (14.7x) compared to the Specialty Retail industry average (16.7x).

PE vs Market: SUL is good value based on its PE Ratio (14.7x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SUL is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: SUL is good value based on its PB Ratio (2.3x) compared to the AU Specialty Retail industry average (2.3x).


Next Steps

Future Growth

How is Super Retail Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

5.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SUL's forecast earnings growth (6.6% per year) is above the savings rate (1.1%).

Earnings vs Market: SUL's earnings (6.6% per year) are forecast to grow slower than the Australian market (9.6% per year).

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

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

High Growth Revenue: SUL's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SUL's Return on Equity is forecast to be low in 3 years time (17.5%).


Next Steps

Past Performance

How has Super Retail Group performed over the past 5 years?

7.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SUL has high quality earnings.

Growing Profit Margin: SUL's current net profit margins (5.1%) are higher than last year (5%).


Past Earnings Growth Analysis

Earnings Trend: SUL's earnings have grown by 7.2% per year over the past 5 years.

Accelerating Growth: SUL's earnings growth over the past year (8.7%) exceeds its 5-year average (7.2% per year).

Earnings vs Industry: SUL earnings growth over the past year (8.7%) exceeded the Specialty Retail industry -2%.


Return on Equity

High ROE: SUL's Return on Equity (17.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Super Retail Group's financial position?


Financial Position Analysis

Short Term Liabilities: SUL's short term assets (A$610.0M) exceed its short term liabilities (A$479.6M).

Long Term Liabilities: SUL's short term assets (A$610.0M) exceed its long term liabilities (A$483.4M).


Debt to Equity History and Analysis

Debt Level: SUL's debt to equity ratio (48.2%) is considered high.

Reducing Debt: SUL's debt to equity ratio has reduced from 53.1% to 48.2% over the past 5 years.

Debt Coverage: SUL's debt is well covered by operating cash flow (61.3%).

Interest Coverage: SUL's interest payments on its debt are well covered by EBIT (9.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: SUL's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

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

5.29%

Current Dividend Yield


Dividend Yield vs Market

company5.3%marketbottom25%2.3%markettop25%5.5%industryaverage4.0%forecastin3Years5.4%

Current dividend yield vs market & industry

Notable Dividend: SUL's dividend (4.81%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: SUL's dividend (4.81%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

Stable Dividend: SUL's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (70.8%), SUL's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SUL's dividends in 3 years are forecast to be covered by earnings (65.1% payout ratio).


Next Steps

Management

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

1.0yrs

Average management tenure


CEO

Anthony Heraghty (45yo)

0.9yrs

Tenure

AU$1,578,084

Compensation

Mr. Anthony Michael Heraghty, BBus has been Group Managing Director, Chief Executive Officer and Director at Super Retail Group Limited since February 2019. Mr. Heraghty served as Managing Director of Outd ...


CEO Compensation Analysis

Compensation vs Market: Anthony's total compensation ($USD1.09M) is about average for companies of similar size in the Australian market ($USD1.41M).

Compensation vs Earnings: Anthony's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.0yrs

Average Tenure

Experienced Management: SUL's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

2.3yrs

Average Tenure

55yo

Average Age

Experienced Board: SUL's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


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$1,612,93027 Dec 19
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Ownership Breakdown

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


Management Team

  • David Burns

    Chief Financial Officer

    • Tenure: 7.1yrs
    • Compensation: AU$967.07k
  • Gary Williams

    Managing Director of Rebel

    • Tenure: 0.8yrs
    • Compensation: AU$323.86k
  • Anthony Heraghty (45yo)

    Group MD

    • Tenure: 0.9yrs
    • Compensation: AU$1.58m
  • Justin Ross

    Interim Group General Counsel & Company Secretary

    • Tenure: 0.3yrs
  • Katie McNamara

    Chief Strategy & Customer Officer

    • Tenure: 0.8yrs
  • Paul Hayes

    Chief Information Officer

    • Tenure: 4.1yrs
  • Jane Kelly

    Chief Human Resources Officer

    • Tenure: 3.5yrs
  • Darren Wedding

    Chief Supply Chain Officer

    • Tenure: 1yrs
  • Alex Brandon

    Chief Executive Officer of Macpac

    • Tenure: 7.5yrs
    • Compensation: AU$412.68k
  • Robert Wruck

    Head of Investor Relations


    Board Members

    • Howard Mowlem

      Independent Non-Executive Director

      • Tenure: 2.6yrs
      • Compensation: AU$166.14k
    • Reg Rowe (75yo)

      Non Executive Director

      • Tenure: 15.8yrs
      • Compensation: AU$141.14k
    • Sally Anne Pitkin (60yo)

      Independent Non-Executive Chair

      • Tenure: 2.3yrs
      • Compensation: AU$313.65k
    • Peter Everingham (50yo)

      Independent Non-Executive Director

      • Tenure: 2.1yrs
      • Compensation: AU$161.14k
    • Anthony Heraghty (45yo)

      Group MD

      • Tenure: 0.9yrs
      • Compensation: AU$1.58m

    Company Information

    Super Retail Group Limited's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Super Retail Group Limited
    • Ticker: SUL
    • Exchange: ASX
    • Founded: 1972
    • Industry: Specialty Stores
    • Sector: Retail
    • Market Cap: AU$1.867b
    • Shares outstanding: 197.54m
    • Website: https://www.superretailgroup.com

    Number of Employees


    Location

    • Super Retail Group Limited
    • 6 Coulthards Avenue
    • Strathpine
    • Queensland
    • 4501
    • Australia

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SULASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2004
    RSUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2004
    SULCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2004

    Biography

    Super Retail Group Limited operates as a retailer of auto, sports, and outdoor leisure in Australia, New Zealand, and China. The company offers automotive parts and accessories, handyman items, and tools and equipment to marine and motorbike products, including batteries, car care products, exterior accessories, hand and power tools, in-car navigation systems, in-car stereo equipment, lighting and electrical products, oils, filters and additives, outdoor equipment and accessories, seat covers and interior accessories, spare parts, paints and panels, and performance products. It also provides footwear, fitness and sports equipment, apparel, and related accessories for casual enthusiast and serious competitors; and boating, camping, and fishing products, such as lures, rods and reels, tackle boxes, fishing nets, tents, ropes, pegs, cooking equipment, and clothing and hiking gears, as well as boating accessories comprising fishing rod holders, bilge pumps, fishfinders, and others. In addition, the company offers apparel and equipment for mountain climbers, campers, hiker, and others; and products for travel, touring, outdoors, garages, and sheds. It sells its products under the BCF, Macpac, Rebel, and Supercheap Auto brands. It operates 690 stores. The company was formerly known as Super Cheap Auto Group Limited and changed its name to Super Retail Group Limited in 2010. Super Retail Group Limited was founded in 1972 and is headquartered in Strathpine, Australia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 10:31
    End of Day Share Price2020/01/24 00:00
    Earnings2019/06/29
    Annual Earnings2019/06/29


    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.