ASX:AZJ

Stock Analysis Report

Executive Summary

Aurizon Holdings Limited, through its subsidiaries, operates as a rail freight operator in Australia.

Rewards

Earnings are forecast to grow 4.46% per year

Risk Analysis

Dividend of 4.23% is not well covered by earnings or forecast to be in the next 3 years

Has a high level of debt



Snowflake Analysis

Imperfect balance sheet with questionable track record.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.6%

AZJ

-0.6%

AU Transportation

-0.07%

AU Market


1 Year Return

26.9%

AZJ

19.5%

AU Transportation

19.1%

AU Market

Return vs Industry: AZJ exceeded the Australian Transportation industry which returned 19.5% over the past year.

Return vs Market: AZJ exceeded the Australian Market which returned 19.1% over the past year.


Shareholder returns

AZJIndustryMarket
7 Day2.6%-0.6%-0.07%
30 Day-2.6%-3.6%-0.6%
90 Day-2.8%-4.9%0.4%
1 Year32.8%26.9%25.4%19.5%25.0%19.1%
3 Year33.8%15.2%37.0%29.7%36.0%17.4%
5 Year65.1%27.7%51.8%30.9%63.2%26.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

23.63x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AZJ (A$5.62) is trading above our estimate of fair value (A$4.83)

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


Price To Earnings Ratio

PE vs Industry: AZJ is poor value based on its PE Ratio (23.6x) compared to the Transportation industry average (15.6x).

PE vs Market: AZJ is poor value based on its PE Ratio (23.6x) compared to the Australian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: AZJ is poor value based on its PEG Ratio (5.3x)


Price to Book Ratio

PB vs Industry: AZJ is overvalued based on its PB Ratio (2.4x) compared to the XO Transportation industry average (1.5x).


Next Steps

Future Growth

How is Aurizon Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AZJ's forecast earnings growth (4.5% per year) is above the savings rate (1.1%).

Earnings vs Market: AZJ's earnings (4.5% per year) are forecast to grow slower than the Australian market (9.3% per year).

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

Revenue vs Market: AZJ's revenue (1.8% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: AZJ's revenue (1.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AZJ's Return on Equity is forecast to be low in 3 years time (14.6%).


Next Steps

Past Performance

How has Aurizon Holdings performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AZJ has high quality earnings.

Growing Profit Margin: AZJ's current net profit margins (16.3%) are lower than last year (18%).


Past Earnings Growth Analysis

Earnings Trend: AZJ's earnings have grown by 3.3% per year over the past 5 years.

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

Earnings vs Industry: AZJ had negative earnings growth (-15.5%) over the past year, making it difficult to compare to the Transportation industry average (6%).


Return on Equity

High ROE: AZJ's Return on Equity (10.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Aurizon Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: AZJ's short term assets (A$739.6M) do not cover its short term liabilities (A$948.5M).

Long Term Liabilities: AZJ's short term assets (A$739.6M) do not cover its long term liabilities (A$4.1B).


Debt to Equity History and Analysis

Debt Level: AZJ's debt to equity ratio (73.1%) is considered high.

Reducing Debt: AZJ's debt to equity ratio has increased from 45% to 73.1% over the past 5 years.

Debt Coverage: AZJ's debt is well covered by operating cash flow (37.8%).

Interest Coverage: AZJ's interest payments on its debt are well covered by EBIT (5.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: AZJ's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

4.23%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%2.4%markettop25%5.5%industryaverage4.5%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: AZJ's dividend (4.23%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: AZJ's dividend (4.23%) is low compared to the top 25% of dividend payers in the Australian market (5.55%).


Stability and Growth of Payments

Stable Dividend: AZJ has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: AZJ's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (100.1%), AZJ's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AZJ's dividends in 3 years are not forecast to be well covered by earnings (99.2% payout ratio).


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Tony Harding (52yo)

3yrs

Tenure

AU$4,337,000

Compensation

Mr. Andrew T. Harding, also known as Tony, B.Eng. (Mining Engineering), MBA, has been the Chief Executive Officer, Managing Director and Director of Aurizon Holdings Limited and Aurizon Network Pty Ltd. si ...


CEO Compensation Analysis

Compensation vs Market: Tony's total compensation ($USD2.96M) is about average for companies of similar size in the Australian market ($USD2.88M).

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


Management Age and Tenure

3.0yrs

Average Tenure

Experienced Management: AZJ's management team is considered experienced (3 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

54.5yo

Average Age

Experienced Board: AZJ's board of directors are considered experienced (3.8 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$4,53803 Oct 19
Andrew Harding
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares871
Max PriceAU$5.35
BuyAU$50,00015 Aug 19
Marcelo De Almeida Bastos
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares8,547
Max PriceAU$5.85
SellAU$4,489,16727 Jun 19
UniSuper Limited
EntityCompany
Shares1,058,703
Max PriceAU$4.30
BuyAU$4,489,16727 Jun 19
UniSuper Limited
EntityCompany
Shares1,058,703
Max PriceAU$4.30
SellAU$388,967,71327 Jun 19
UniSuper Limited
EntityCompany
Shares72,810,906
Max PriceAU$5.35
BuyAU$139,59027 Jun 19
UniSuper Limited
EntityCompany
Shares26,000
Max PriceAU$5.37
SellAU$180,984,12718 Jun 19
UniSuper Limited
EntityCompany
Shares36,494,976
Max PriceAU$4.97
BuyAU$3,782,66718 Jun 19
UniSuper Limited
EntityCompany
Shares784,901
Max PriceAU$4.93
BuyAU$65,429,01913 May 19
Perpetual Limited
EntityCompany
Shares14,611,006
Max PriceAU$4.48
SellAU$131,007,41713 May 19
Perpetual Limited
EntityCompany
Shares28,516,581
Max PriceAU$4.59
BuyAU$48,60008 May 19
Andrew Harding
EntityIndividual
Role
Chief Executive Officer
MD, CEO & Director
Shares10,000
Max PriceAU$4.86
BuyAU$145,65006 May 19
Michael Fraser
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares30,000
Max PriceAU$4.86
SellAU$297,35328 Jan 19
BlackRock, Inc.
EntityCompany
Shares31,274,353
Max PriceAU$5.93
BuyAU$028 Jan 19
BlackRock, Inc.
EntityCompany
Shares47,360,732
Max PriceAU$5.66
SellAU$1,506,70627 Dec 18
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares363,345
Max PriceAU$4.19
SellAU$157,11327 Dec 18
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares38,227
Max PriceAU$4.11
BuyAU$3,257,44227 Dec 18
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares790,833
Max PriceAU$4.17
BuyAU$4,06527 Dec 18
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares989
Max PriceAU$4.11
BuyAU$476,516,93024 Dec 18
Perpetual Limited
EntityCompany
Shares116,459,668
Max PriceAU$4.09
SellAU$41,702,10224 Dec 18
Perpetual Limited
EntityCompany
Shares9,647,974
Max PriceAU$4.32

Ownership Breakdown

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


Management Team

  • Dominic Smith (55yo)

    Company Secretary

    • Tenure: 9.3yrs
  • Chris Vagg

    Head of Investor Relations & Group Treasurer

    • Tenure: 0yrs
  • Tony Harding (52yo)

    MD, CEO & Director

    • Tenure: 3yrs
    • Compensation: AU$4.34m
  • Tina Thomas

    Group Executive of Corporate

    • Tenure: 2.4yrs
  • Mike Carter

    Group Executive of Technical Services & Planning

    • Tenure: 2.4yrs
    • Compensation: AU$1.53m
  • Pam Bains

    CFO & Group Executive of Strategy

    • Tenure: 3yrs
    • Compensation: AU$1.59m
  • Mark Hairsine

    Manager of Media & Communications

    • Tenure: 0yrs
  • James Coe

    Manager of Market Intelligence & Sustainability

    • Tenure: 0yrs

Board Members

  • Michael Fraser (62yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: AU$218.00
  • Tim Poole (50yo)

    Independent Chairman

    • Tenure: 4.3yrs
    • Compensation: AU$492.00
  • Russell Caplan (72yo)

    Independent Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: AU$216.00
  • Marcelo De Almeida Bastos (56yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: AU$212.00
  • Tony Harding (52yo)

    MD, CEO & Director

    • Tenure: 3yrs
    • Compensation: AU$4.34m
  • Sarah Ryan (53yo)

    Non-Executive Director

    • Tenure: 0yrs
  • Lyell Strambi

    Non-Executive Director

    • Tenure: 0yrs
  • Sam Lewis

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$221.00
  • Kate Vidgen

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: AU$203.00

Company Information

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


Key Information

  • Name: Aurizon Holdings Limited
  • Ticker: AZJ
  • Exchange: ASX
  • Founded: 2010
  • Industry: Railroads
  • Sector: Transportation
  • Market Cap: AU$11.002b
  • Shares outstanding: 1.96b
  • Website: https://www.aurizon.com.au

Number of Employees


Location

  • Aurizon Holdings Limited
  • 900 Ann Street
  • Level 8
  • Fortitude Valley
  • Queensland
  • 4006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AZJASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2010
QRNN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 2010
QRLDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2010
AZJCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2010
AZNN.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 2016

Biography

Aurizon Holdings Limited, through its subsidiaries, operates as a rail freight operator in Australia. It operates through Network, Coal, Bulk, and Other segments. The company transports various commodities ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 10:37
End of Day Share Price2019/12/11 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.