TSX:TRI

Stock Analysis Report

Executive Summary

Thomson Reuters Corporation provides news and information-based tools to professionals worldwide.

Rewards

Earnings are forecast to grow 25.65% per year

Risk Analysis

Dividend of 2.03% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (2.7%) are lower than last year (8.6%)



Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.7%

TRI

1.9%

CA Professional Services

0.4%

CA Market


1 Year Return

39.9%

TRI

37.4%

CA Professional Services

11.0%

CA Market

Return vs Industry: TRI exceeded the Canadian Professional Services industry which returned 37.4% over the past year.

Return vs Market: TRI exceeded the Canadian Market which returned 11% over the past year.


Shareholder returns

TRIIndustryMarket
7 Day1.7%1.9%0.4%
30 Day5.7%5.7%0.01%
90 Day6.8%7.6%0.9%
1 Year43.1%39.9%40.5%37.4%14.7%11.0%
3 Year56.3%43.4%52.2%40.3%15.1%4.6%
5 Year116.6%85.8%108.7%80.5%37.8%17.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

251.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TRI (CA$94.06) is trading above our estimate of fair value (CA$73.81)

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


Price To Earnings Ratio

PE vs Industry: TRI is poor value based on its PE Ratio (251.4x) compared to the Professional Services industry average (78.5x).

PE vs Market: TRI is poor value based on its PE Ratio (251.4x) compared to the Canadian market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: TRI is poor value based on its PEG Ratio (9.8x)


Price to Book Ratio

PB vs Industry: TRI is overvalued based on its PB Ratio (4.1x) compared to the CA Professional Services industry average (3x).


Next Steps

Future Growth

How is Thomson Reuters forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

25.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TRI's forecast earnings growth (25.6% per year) is above the savings rate (1.4%).

Earnings vs Market: TRI's earnings (25.6% per year) are forecast to grow faster than the Canadian market (9.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TRI's revenue (4.6% per year) is forecast to grow slower than the Canadian market (4.9% per year).

High Growth Revenue: TRI's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TRI's Return on Equity is forecast to be low in 3 years time (12.7%).


Next Steps

Past Performance

How has Thomson Reuters performed over the past 5 years?

-36.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TRI has a large one-off gain of $255.0M impacting its September 30 2019 financial results.

Growing Profit Margin: TRI's current net profit margins (2.7%) are lower than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: TRI's earnings have declined by -36.4% per year over the past 5 years.

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

Earnings vs Industry: TRI had negative earnings growth (-65.6%) over the past year, making it difficult to compare to the Professional Services industry average (-9.3%).


Return on Equity

High ROE: TRI's Return on Equity (1.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Thomson Reuters's financial position?


Financial Position Analysis

Short Term Liabilities: TRI's short term assets ($2.9B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: TRI's short term assets ($2.9B) do not cover its long term liabilities ($5.4B).


Debt to Equity History and Analysis

Debt Level: TRI's debt to equity ratio (38.4%) is considered satisfactory.

Reducing Debt: TRI's debt to equity ratio has reduced from 58.1% to 38.4% over the past 5 years.

Debt Coverage: TRI's debt is not well covered by operating cash flow (10.2%).

Interest Coverage: TRI's interest payments on its debt are well covered by EBIT (4.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: TRI's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

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

2.03%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%2.0%markettop25%5.6%industryaverage1.3%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: TRI's dividend (2.03%) is higher than the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: TRI's dividend (2.03%) is low compared to the top 25% of dividend payers in the Canadian market (5.57%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (505.5%), TRI's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TRI's dividends in 3 years are forecast to be covered by earnings (82.5% payout ratio).


Next Steps

Management

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

6.4yrs

Average management tenure


CEO

Jim Smith (59yo)

7.9yrs

Tenure

US$14,485,109

Compensation

Mr. James C. Smith, also known as Jim, has been the Chief Executive Officer and President of Thomson Corporation (Now Thomson Reuters Corporation) since January 2012. Mr. Smith served as chief operating of ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD14.49M) is above average for companies of similar size in the Canadian market ($USD6.86M).

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


Management Age and Tenure

6.4yrs

Average Tenure

58.5yo

Average Age

Experienced Management: TRI's management team is seasoned and experienced (6.4 years average tenure).


Board Age and Tenure

6.3yrs

Average Tenure

64.5yo

Average Age

Experienced Board: TRI's board of directors are considered experienced (6.3 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$42,923,36106 Dec 19
The Woodbridge Company Limited
EntityCompany
Shares468,340
Max PriceUS$91.65
SellUS$10,073,17407 Nov 19
Stephane Bello
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares114,317
Max PriceUS$88.15
SellUS$44,222,72928 Aug 19
The Woodbridge Company Limited
EntityCompany
Shares500,000
Max PriceUS$88.83
SellUS$311,77417 May 19
Marc Gold
EntityIndividual
Shares3,548
Max PriceUS$87.89
SellUS$390,83122 Mar 19
Stewart Beaumont
EntityIndividual
Role
Chief Technology Officer
Chief Technology Officer
Shares5,212.24
Max PriceUS$74.98
SellUS$164,85122 Mar 19
Charlotte Rushton
EntityIndividual
Shares2,145
Max PriceUS$76.85
SellUS$1,480,43520 Mar 19
Brian Peccarelli
EntityIndividual
Role
Senior Key Executive
Executive VP & COO of Customer Markets
Shares19,579
Max PriceUS$75.61
SellUS$28,51919 Mar 19
Sean Cannizzaro
EntityIndividual
Shares380
Max PriceUS$75.05
SellUS$893,23519 Mar 19
Linda Walker
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares11,832
Max PriceUS$75.49
SellUS$343,30218 Mar 19
Brian Scanlon
EntityIndividual
Shares4,567
Max PriceUS$75.17
SellUS$2,369,07418 Mar 19
Neil Masterson
EntityIndividual
Role
Senior Key Executive
Executive VP and COO of Operations & Enablement
Shares31,854
Max PriceUS$74.37
BuyUS$1,028,22111 Mar 19
Brian Scanlon
EntityIndividual
Shares20,894
Max PriceUS$49.21
SellUS$2,754,46311 Mar 19
Brian Scanlon
EntityIndividual
Shares37,654
Max PriceUS$73.15
SellUS$2,086,79401 Mar 19
Brian Peccarelli
EntityIndividual
Role
Senior Key Executive
Executive VP & COO of Customer Markets
Shares29,419
Max PriceUS$70.93

Ownership Breakdown

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


Management Team

  • Jim Smith (59yo)

    President

    • Tenure: 7.9yrs
    • Compensation: US$14.49m
  • Stephane Bello (59yo)

    Executive VP & CFO

    • Tenure: 7.9yrs
    • Compensation: US$4.90m
  • Linda Walker

    Chief Accounting Officer

    • Tenure: 0yrs
  • Frank Golden (61yo)

    Senior Vice President of Investor Relations

    • Tenure: 0yrs
  • Andrew Perrin

    Vice President of Corporate Development

    • Tenure: 4.9yrs
  • Mike Friedenberg (52yo)

    President of Reuters News

    • Tenure: 1yrs
    • Compensation: US$5.66m
  • Brian Peccarelli (58yo)

    Executive VP & COO of Customer Markets

    • Tenure: 8.8yrs
    • Compensation: US$7.09m
  • Neil Masterson (50yo)

    Executive VP and COO of Operations & Enablement

    • Tenure: 0yrs
    • Compensation: US$7.03m
  • Stewart Beaumont

    Chief Technology Officer

    • Tenure: 0yrs
  • Thomas Kim

    General Counsel & Company Secretary

    • Tenure: 0.2yrs

Board Members

  • Ed Clark (71yo)

    Corporate Director

    • Tenure: 4.3yrs
    • Compensation: US$250.00k
  • David Kenneth Thomson (62yo)

    Chairman of the Board

    • Tenure: 17.6yrs
    • Compensation: US$600.00k
  • Vance Opperman (76yo)

    Lead Independent Director

    • Tenure: 6.9yrs
    • Compensation: US$350.00k
  • Peter Thomson (54yo)

    Director

    • Tenure: 24.9yrs
    • Compensation: US$200.00k
  • Jim Smith (59yo)

    President

    • Tenure: 7.9yrs
    • Compensation: US$14.49m
  • Wulf von Schimmelmann (72yo)

    Corporate Director

    • Tenure: 8.4yrs
    • Compensation: US$200.00k
  • Barry Salzberg (65yo)

    Corporate Director

    • Tenure: 4.3yrs
    • Compensation: US$250.00k
  • David Binet (61yo)

    Deputy Chairman of the Board

    • Tenure: 5.6yrs
    • Compensation: US$350.00k
  • Sheila Bair (65yo)

    Corporate Director

    • Tenure: 5.6yrs
    • Compensation: US$228.49k
  • Mike Daniels (64yo)

    Corporate Director

    • Tenure: 5.6yrs
    • Compensation: US$228.49k

Company Information

Thomson Reuters Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Thomson Reuters Corporation
  • Ticker: TRI
  • Exchange: TSX
  • Founded: 1799
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: CA$46.883b
  • Shares outstanding: 499.87m
  • Website: https://www.thomsonreuters.com

Number of Employees


Location

  • Thomson Reuters Corporation
  • 333 Bay Street
  • Suite 400
  • Toronto
  • Ontario
  • M5H 2R2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TRINYSE (New York Stock Exchange)YesCorporation Common SharesUSUSDJun 1989
TRITSX (The Toronto Stock Exchange)YesCorporation Common SharesCACADJun 1989
TOCBDB (Deutsche Boerse AG)YesCorporation Common SharesDEEURJun 1989
0Q89LSE (London Stock Exchange)YesCorporation Common SharesGBCADJun 1989
TOCBBST (Boerse-Stuttgart)YesCorporation Common SharesDEEURJun 1989
TOCBDUSE (Dusseldorf Stock Exchange)YesCorporation Common SharesDEEURJun 1989

Biography

Thomson Reuters Corporation provides news and information-based tools to professionals worldwide. It operates through five segments: Legal Professionals, Corporates, Tax Professionals, Reuters News, and Gl ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 23:46
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.