ASX:TCL

Stock Analysis Report

Executive Summary

Transurban Group develops, operates, manages, maintains, and finances urban toll road networks.

Rewards

Earnings are forecast to grow 26.46% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 3.94% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

Profit margins (4.1%) are lower than last year (14.7%)

+ 1 more risk


Snowflake Analysis

Moderate growth potential unattractive dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.8%

TCL

-0.04%

AU Infrastructure

0.4%

AU Market


1 Year Return

31.3%

TCL

29.9%

AU Infrastructure

19.5%

AU Market

Return vs Industry: TCL exceeded the Australian Infrastructure industry which returned 29.9% over the past year.

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


Shareholder returns

TCLIndustryMarket
7 Day0.8%-0.04%0.4%
30 Day1.8%2.0%4.4%
90 Day6.8%6.2%5.0%
1 Year36.7%31.3%35.2%29.9%24.9%19.5%
3 Year79.7%55.0%78.0%54.7%38.6%19.9%
5 Year119.0%72.5%122.4%77.5%60.0%24.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

239.56x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TCL (A$15.73) is trading above our estimate of fair value (A$14.27)

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


Price To Earnings Ratio

PE vs Industry: TCL is poor value based on its PE Ratio (237.1x) compared to the Infrastructure industry average (29.6x).

PE vs Market: TCL is poor value based on its PE Ratio (237.1x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TCL is poor value based on its PEG Ratio (9x)


Price to Book Ratio

PB vs Industry: TCL is overvalued based on its PB Ratio (4.8x) compared to the XO Infrastructure industry average (2.3x).


Next Steps

Future Growth

How is Transurban Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

26.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TCL's forecast earnings growth (26.5% per year) is above the savings rate (1.1%).

Earnings vs Market: TCL's earnings (26.5% 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: TCL's revenue is expected to decline over the next 3 years (-0.1% per year).

High Growth Revenue: TCL's revenue is forecast to decline over the next 3 years (-0.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TCL's Return on Equity is forecast to be low in 3 years time (11.4%).


Next Steps

Past Performance

How has Transurban Group performed over the past 5 years?

31.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TCL has a large one-off gain of A$203.0M impacting its June 30 2019 financial results.

Growing Profit Margin: TCL's current net profit margins (4.1%) are lower than last year (14.7%).


Past Earnings Growth Analysis

Earnings Trend: TCL's earnings have grown significantly by 31.3% per year over the past 5 years.

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

Earnings vs Industry: TCL had negative earnings growth (-64.7%) over the past year, making it difficult to compare to the Infrastructure industry average (-19.5%).


Return on Equity

High ROE: TCL's Return on Equity (1.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Transurban Group's financial position?


Financial Position Analysis

Short Term Liabilities: TCL's short term assets (A$1.9B) do not cover its short term liabilities (A$3.8B).

Long Term Liabilities: TCL's short term assets (A$1.9B) do not cover its long term liabilities (A$22.3B).


Debt to Equity History and Analysis

Debt Level: TCL's debt to equity ratio (191.6%) is considered high.

Reducing Debt: TCL's debt to equity ratio has increased from 122.9% to 191.6% over the past 5 years.

Debt Coverage: TCL's debt is not well covered by operating cash flow (6.3%).

Interest Coverage: TCL's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: TCL's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

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

3.90%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.3%markettop25%5.5%industryaverage3.4%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: TCL's dividend (3.94%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: TCL's dividend (3.94%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (889.5%), TCL's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TCL's dividends in 3 years are not forecast to be well covered by earnings (276.9% payout ratio).


Next Steps

Management

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

5.5yrs

Average management tenure


CEO

Scott Charlton (55yo)

7.5yrs

Tenure

AU$7,168,727

Compensation

Mr. Scott Charlton, BSci, BEng (Elec), MBA, Member of FEI, FTA, has been the Chief Executive Officer at Transurban Ltd., and Transurban Group since July 16, 2012. Mr. Charlton has been the Chief Executive  ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD4.95M) is about average for companies of similar size in the Australian market ($USD3.87M).

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


Management Age and Tenure

5.5yrs

Average Tenure

Experienced Management: TCL's management team is seasoned and experienced (5.5 years average tenure).


Board Age and Tenure

7.6yrs

Average Tenure

60.5yo

Average Age

Experienced Board: TCL's board of directors are considered experienced (7.6 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellAU$151,50022 Nov 19
Neil Chatfield
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceAU$15.15
SellAU$6,470,00029 Mar 19
Scott Charlton
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares500,000
Max PriceAU$12.94
BuyAU$33,29826 Feb 19
Mark Birrell
EntityIndividual
Role
Member of the Board of Directors
Independent Non-executive Director
Shares2,649
Max PriceAU$12.57
SellAU$125,70026 Feb 19
Neil Chatfield
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceAU$12.57
BuyAU$49,04020 Feb 19
Elizabeth Wilson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-executive Director
Shares4,000
Max PriceAU$12.26
SellAU$675,486,48019 Feb 19
UniSuper Management Pty Limited
EntityCompany
Shares56,126,557
Max PriceAU$12.04
BuyAU$1,238,161,97519 Feb 19
UniSuper Management Pty Limited
EntityCompany
Shares110,806,258
Max PriceAU$11.17

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 20.6%.


Management Team

  • Scott Charlton (55yo)

    CEO & Executive Director

    • Tenure: 7.5yrs
    • Compensation: AU$7.17m
  • Andrew Head

    Chief Executive Officer – WestConnex

    • Compensation: AU$947.19k
  • Julie Galligan

    General Counsel & Company Secretary

    • Tenure: 7.9yrs
  • Lisa Tobin

    Group Executive of Technology

    • Tenure: 6.9yrs
    • Compensation: AU$1.54m
  • Jennifer Aument

    President of North America

    • Tenure: 1.9yrs
    • Compensation: AU$2.01m
  • Adam Watson (45yo)

    Chief Financial Officer

    • Tenure: 5.1yrs
    • Compensation: AU$2.01m
  • Tony Adams

    Group Executive of Project Delivery

    • Tenure: 5.5yrs
    • Compensation: AU$1.65m
  • Michele Huey

    Group Executive of New South Wales

    • Tenure: 5yrs
    • Compensation: AU$1.07m
  • Tess Palmer

    Head of Investor Relations

    • Josie Brophy

      Manager of Media & Communication


      Board Members

      • Scott Charlton (55yo)

        CEO & Executive Director

        • Tenure: 7.5yrs
        • Compensation: AU$7.17m
      • Sam Mostyn (54yo)

        Independent Non-Executive Director

        • Tenure: 9.1yrs
        • Compensation: AU$250.00k
      • Christine O’Reilly (58yo)

        Independent Non-Executive Director

        • Tenure: 7.8yrs
        • Compensation: AU$255.00k
      • Neil Chatfield (65yo)

        Independent Non-Executive Director

        • Tenure: 10.9yrs
        • Compensation: AU$250.00k
      • Mark Birrell (61yo)

        Independent Non-executive Director

        • Tenure: 1.7yrs
        • Compensation: AU$207.08k
      • Elizabeth Wilson (60yo)

        Independent Non-executive Director

        • Tenure: 3yrs
        • Compensation: AU$225.00k
      • Peter Scott (65yo)

        Independent Non-Executive Director

        • Tenure: 3.8yrs
        • Compensation: AU$230.00k
      • Lindsay Maxsted (65yo)

        Independent Chairman of the Board

        • Tenure: 9.4yrs
        • Compensation: AU$600.00k

      Company Information

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


      Key Information

      • Name: Transurban Group
      • Ticker: TCL
      • Exchange: ASX
      • Founded:
      • Industry: Highways and Railtracks
      • Sector: Transportation
      • Market Cap: AU$43.429b
      • Shares outstanding: 2.73b
      • Website: https://www.transurban.com.au

      Number of Employees


      Location

      • Transurban Group
      • Tower Five
      • Level 31
      • Melbourne
      • Victoria
      • 3008
      • Australia

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      TCLASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDApr 1996
      TRAU.FOTCPK (Pink Sheets LLC)YesStapled SecuritiesUSUSDApr 1996
      TU9DB (Deutsche Boerse AG)YesStapled SecuritiesDEEURApr 1996
      TCLCHIA (Chi-X Australia)YesStapled SecuritiesAUAUDApr 1996
      TU9DUSE (Dusseldorf Stock Exchange)YesStapled SecuritiesDEEURApr 1996

      Biography

      Transurban Group develops, operates, manages, maintains, and finances urban toll road networks. It holds 17 toll roads in Sydney, Melbourne, and Brisbane, Australia, as well as the Greater Washington area and Montreal, North America. The company is headquartered in Melbourne, 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 10:33
      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.