ASX:CDA

Stock Analysis Report

Executive Summary

Codan Limited develops rugged and electronics solutions for organizations, mining companies, security and military groups, and governments worldwide.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-2.3%

CDA

-2.4%

AU Electronic

0.6%

AU Market


1 Year Return

161.5%

CDA

111.5%

AU Electronic

20.2%

AU Market

Return vs Industry: CDA exceeded the Australian Electronic industry which returned 110.1% over the past year.

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


Shareholder returns

CDAIndustryMarket
7 Day-2.3%-2.4%0.6%
30 Day8.8%6.9%4.3%
90 Day41.4%19.3%4.9%
1 Year171.5%161.5%116.7%111.5%25.6%20.2%
3 Year337.2%281.5%96.5%83.7%39.4%20.7%
5 Year1105.9%859.5%189.0%161.6%60.8%24.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

30.65x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CDA (A$7.82) is trading above our estimate of fair value (A$7.63)

Significantly Below Fair Value: CDA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CDA is poor value based on its PE Ratio (30.7x) compared to the Electronic industry average (27.4x).

PE vs Market: CDA is poor value based on its PE Ratio (33.1x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CDA is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: CDA is overvalued based on its PB Ratio (7.2x) compared to the AU Electronic industry average (4.1x).


Next Steps

Future Growth

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

12.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CDA's forecast earnings growth (12.9% per year) is above the savings rate (1.1%).

Earnings vs Market: CDA's earnings (12.9% per year) are forecast to grow faster than the Australian market (9.6% per year).

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

Revenue vs Market: CDA's revenue (10.4% per year) is forecast to grow faster than the Australian market (3.8% per year).

High Growth Revenue: CDA's revenue (10.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CDA's Return on Equity is forecast to be high in 3 years time (22.6%)


Next Steps

Past Performance

How has Codan performed over the past 5 years?

33.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CDA has high quality earnings.

Growing Profit Margin: CDA's current net profit margins (16.9%) are lower than last year (18.1%).


Past Earnings Growth Analysis

Earnings Trend: CDA's earnings have grown significantly by 33.2% per year over the past 5 years.

Accelerating Growth: CDA's earnings growth over the past year (9.8%) is below its 5-year average (33.2% per year).

Earnings vs Industry: CDA earnings growth over the past year (9.8%) exceeded the Electronic industry -74%.


Return on Equity

High ROE: CDA's Return on Equity (21.6%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Codan's financial position?


Financial Position Analysis

Short Term Liabilities: CDA's short term assets (A$102.5M) exceed its short term liabilities (A$53.8M).

Long Term Liabilities: CDA's short term assets (A$102.5M) exceed its long term liabilities (A$9.3M).


Debt to Equity History and Analysis

Debt Level: CDA is debt free.

Reducing Debt: CDA has no debt compared to 5 years ago when its debt to equity ratio was 49.8%.

Debt Coverage: CDA has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CDA has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if CDA's debt is covered by short term assets.


Next Steps

Dividend

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

1.79%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%2.3%markettop25%5.6%industryaverage1.6%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: CDA's dividend (1.66%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: CDA's dividend (1.66%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.3%), CDA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CDA's dividends in 3 years are forecast to be covered by earnings (57.7% payout ratio).


Next Steps

Management

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

9.8yrs

Average management tenure


CEO

Donald McGurk (57yo)

9.2yrs

Tenure

AU$1,229,034

Compensation

Mr. Donald S. McGurk, HNC(Mech Eng), MBA, FAICD, Harvard AMP has been the Chief Executive Officer and Managing Director of Codan Limited since November 2010. Mr. McGurk has been Executive Director of Codan ...


CEO Compensation Analysis

Compensation vs Market: Donald's total compensation ($USD848.19K) is about average for companies of similar size in the Australian market ($USD959.05K).

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


Management Age and Tenure

9.8yrs

Average Tenure

Experienced Management: CDA's management team is seasoned and experienced (9.8 years average tenure).


Board Age and Tenure

4.9yrs

Average Tenure

62.5yo

Average Age

Experienced Board: CDA's board of directors are considered experienced (4.9 years average tenure).


Insider Trading

Insider Buying: CDA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellAU$351,26520 Dec 19
Donald McGurk
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares50,000
Max PriceAU$7.23
SellAU$394,28305 Dec 19
Donald McGurk
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares60,154
Max PriceAU$6.60
SellAU$1,315,32929 Nov 19
Donald McGurk
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Executive Director
Shares197,723
Max PriceAU$6.66
SellAU$4,404,19324 Oct 19
Brian Burns
EntityIndividual
Shares863,926
Max PriceAU$5.11
BuyAU$4,319,36022 Aug 19
Perennial Value Management Limited
EntityCompany
Shares1,331,666
Max PriceAU$3.36
SellAU$7,653,93722 Aug 19
Perennial Value Management Limited
EntityCompany
Shares1,963,378
Max PriceAU$4.26
SellAU$3,160,52927 May 19
Perennial Value Management Limited
EntityCompany
Shares1,008,755
Max PriceAU$3.13
BuyAU$10,801,26227 May 19
Perennial Value Management Limited
EntityCompany
Shares3,308,736
Max PriceAU$3.26

Ownership Breakdown

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


Management Team

  • Donald McGurk (57yo)

    MD, CEO & Executive Director

    • Tenure: 9.2yrs
    • Compensation: AU$1.23m
  • Peter Charlesworth

    Executive General Manager of Minelab & Codan Defence

    • Tenure: 17yrs
    • Compensation: AU$817.98k
  • Michael Barton

    CFO & Company Secretary

    • Tenure: 10.3yrs
    • Compensation: AU$642.12k
  • Rory Linehan

    Chief Technology Officer

    • Tenure: 1yrs
    • Compensation: AU$731.49k
  • S. Sangster

    Executive General Manager of Tactical Communications

    • Compensation: AU$689.78k
  • Kayi Li

    Head of Investor Relations


    Board Members

    • Kathy Gramp (60yo)

      Independent Non-Executive Director

      • Tenure: 4.2yrs
      • Compensation: AU$106.99k
    • David Simmons (65yo)

      Independent Chairman

      • Tenure: 4.9yrs
      • Compensation: AU$196.15k
    • Donald McGurk (57yo)

      MD, CEO & Executive Director

      • Tenure: 9.2yrs
      • Compensation: AU$1.23m
    • Graeme Rodger Barclay

      Independent Non-Executive Director

      • Tenure: 4.9yrs
      • Compensation: AU$98.08k
    • Peter Leahy (66yo)

      Independent Non-Executive Director

      • Tenure: 11.3yrs
      • Compensation: AU$98.08k

    Company Information

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


    Key Information

    • Name: Codan Limited
    • Ticker: CDA
    • Exchange: ASX
    • Founded: 1959
    • Industry: Electronic Equipment and Instruments
    • Sector: Tech
    • Market Cap: AU$1.411b
    • Shares outstanding: 179.99m
    • Website: https://www.codan.com.au

    Number of Employees


    Location

    • Codan Limited
    • Technology Park
    • 2 Second Avenue
    • Mawson Lakes
    • South Australia
    • 5095
    • Australia

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CDAASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2003
    CODA.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2003
    CDACHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2003

    Biography

    Codan Limited develops rugged and electronics solutions for organizations, mining companies, security and military groups, and governments worldwide. It operates through three segments: Communications Equipment, Metal Detection, and Tracking Solutions. The company designs, develops, manufactures, and markets communications equipment for tactical and land mobile radios. It also designs, develops, manufactures, and markets metal detection equipment, including handheld metal detecting technologies for recreational, gold mining, and demining markets. In addition, the company engages in the design, manufacture, maintenance, and support of a range of electronic products and associated software for the mining sector. It provides tracking solutions, which enable real-time monitoring and control of mining operations, for underground hard-rock mines. Further, the company offers manufacturing and support services to the Australian defense industry. It serves its customers through a network of dealers, distributors, and agents. Codan Limited was founded in 1959 and is headquartered in Mawson Lakes, Australia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/24 10:32
    End of Day Share Price2020/01/24 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.