SWX:SUN

Stock Analysis Report

Executive Summary

Sulzer Ltd provides products and services for the oil and gas, power, water, and other markets in Switzerland and internationally.

Rewards

Trading at 22.1% below its fair value

Earnings are forecast to grow 19.59% per year

Earnings grew by 16% over the past year

Pays a reliable dividend of 3.28%

Risk Analysis

Has a high level of debt

Dividend of 3.28% is not well covered by earnings



Snowflake Analysis

Proven track record with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.7%

SUN

-2.8%

CH Machinery

1.2%

CH Market


1 Year Return

6.9%

SUN

4.2%

CH Machinery

18.0%

CH Market

Return vs Industry: SUN exceeded the Swiss Machinery industry which returned 5.7% over the past year.

Return vs Market: SUN underperformed the Swiss Market which returned 17.6% over the past year.


Shareholder returns

SUNIndustryMarket
7 Day-1.7%-2.8%1.2%
30 Day-2.6%-4.2%3.1%
90 Day1.4%-1.3%8.4%
1 Year10.8%6.9%7.2%4.2%23.6%18.0%
3 Year11.0%0.9%21.3%12.8%41.2%24.0%
5 Year30.1%-7.6%54.3%32.0%47.3%23.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

22.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SUN (CHF106.6) is trading below our estimate of fair value (CHF136.82)

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


Price To Earnings Ratio

PE vs Industry: SUN is poor value based on its PE Ratio (29x) compared to the Machinery industry average (22.5x).

PE vs Market: SUN is poor value based on its PE Ratio (29x) compared to the Swiss market (21.3x).


Price to Earnings Growth Ratio

PEG Ratio: SUN is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: SUN is good value based on its PB Ratio (2.3x) compared to the CH Machinery industry average (2.4x).


Next Steps

Future Growth

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

19.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SUN's forecast earnings growth (19.6% per year) is above the savings rate (-0.6%).

Earnings vs Market: SUN's earnings (19.6% per year) are forecast to grow faster than the Swiss market (10.5% per year).

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

Revenue vs Market: SUN's revenue (2.7% per year) is forecast to grow slower than the Swiss market (3.4% per year).

High Growth Revenue: SUN's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SUN's Return on Equity is forecast to be low in 3 years time (14%).


Next Steps

Past Performance

How has Sulzer performed over the past 5 years?

38.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SUN has high quality earnings.

Growing Profit Margin: SUN's current net profit margins (3.4%) are higher than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: SUN's earnings have grown significantly by 38.2% per year over the past 5 years.

Accelerating Growth: SUN's earnings growth over the past year (16%) is below its 5-year average (38.2% per year).

Earnings vs Industry: SUN earnings growth over the past year (16%) exceeded the Machinery industry 2.7%.


Return on Equity

High ROE: SUN's Return on Equity (7.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sulzer's financial position?


Financial Position Analysis

Short Term Liabilities: SUN's short term assets (CHF2.9B) exceed its short term liabilities (CHF1.7B).

Long Term Liabilities: SUN's short term assets (CHF2.9B) exceed its long term liabilities (CHF1.7B).


Debt to Equity History and Analysis

Debt Level: SUN's debt to equity ratio (83.5%) is considered high.

Reducing Debt: SUN's debt to equity ratio has increased from 20% to 83.5% over the past 5 years.

Debt Coverage: SUN's debt is well covered by operating cash flow (22.8%).

Interest Coverage: SUN's interest payments on its debt are well covered by EBIT (17.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: SUN's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

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

3.28%

Current Dividend Yield


Dividend Yield vs Market

company3.3%marketbottom25%1.7%markettop25%3.3%industryaverage2.2%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: SUN's dividend (3.28%) is higher than the bottom 25% of dividend payers in the Swiss market (1.73%).

High Dividend: SUN's dividend (3.28%) is low compared to the top 25% of dividend payers in the Swiss market (3.37%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (95.2%), SUN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SUN's dividends in 3 years are forecast to be well covered by earnings (49.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average management tenure


CEO

Greg Poux-Guillaume (49yo)

4.2yrs

Tenure

CHF5,846,000

Compensation

Mr. Grégoire Poux-Guillaume, also known as Greg, has been the Chief Executive Officer at Sulzer, Ltd., since December 1, 2015 and was its Ad Interim Chief Financial Officer until 2018. Mr. Poux-Guillaume s ...


CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD5.94M) is above average for companies of similar size in the Swiss market ($USD1.52M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Grégoire Poux-Guillaume
Chief Executive Officer4.2yrsCHF5.85m0.063% CHF2.3m
Ghim Lee
Chief Financial Officer1.8yrsCHF36.00k0.023% CHF847.0k
Christoph Ladner
Head of Group Communications and Investor Relations5.7yrsno datano data
Armand Sohet
Chief Human Resources Officer3.9yrsno datano data
Philipp Süess
Head of Europe & America - Sulzer Chemtech0yrsno datano data
Urs Probst
Head of Europe - Markets & Technology0yrsno datano data
Walter Herter
Head of Asia Pacific - Markets & Technology0yrsno datano data
Bruno Gerig
Head of Human Resources - Sulzer Metco0yrsno datano data
Keith Dowle
Head of Europe & Middle East Operations - Sulzer Pumps0yrsno datano data
Richard Müller
Head of Finance & Controlling - Sulzer Turbo Services14.3yrsno datano data

4.2yrs

Average Tenure

54yo

Average Age

Experienced Management: SUN's management team is considered experienced (4.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gerhard Roiss
Independent Director4.8yrsCHF273.00k0.031% CHF1.1m
Peter Löscher
Chairman5.9yrsCHF765.00k0.043% CHF1.6m
Hanne Birgitte Breinbjerg Sørensen
Independent Director1.8yrsCHF260.00kno data
Matthias Bichsel
Vice Chairman4.8yrsCHF321.00k0.015% CHF558.7k
Lukas Braunschweiler
Independent Director1.8yrsCHF226.00kno data
Marco Musetti
Independent Director8.8yrsCHF270.00k0.018% CHF663.3k
Mikhail Lifshitz
Independent Director3.8yrsCHF254.00k0.0043% CHF154.3k

4.8yrs

Average Tenure

62yo

Average Age

Experienced Board: SUN's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Sulzer Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sulzer Ltd
  • Ticker: SUN
  • Exchange: SWX
  • Founded: 1834
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: CHF3.630b
  • Shares outstanding: 34.06m
  • Website: https://www.sulzer.com

Number of Employees


Location

  • Sulzer Ltd
  • Neuwiesenstrasse 15
  • Winterthur
  • Zurich
  • 8401
  • Switzerland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SUNSWX (SIX Swiss Exchange)YesRegistered SharesCHCHFJan 1992
SUL1DB (Deutsche Boerse AG)YesRegistered SharesDEEURJan 1992
0QQ9LSE (London Stock Exchange)YesRegistered SharesGBCHFJan 1992
SULZ.FOTCPK (Pink Sheets LLC)YesRegistered SharesUSUSDJan 1992

Biography

Sulzer Ltd provides products and services for the oil and gas, power, water, and other markets in Switzerland and internationally. The company operates through Pumps Equipment, Rotating Equipment Services, Chemtech, and Applicator Systems divisions. It offers side-mounted horizontal and top-mounted vertical agitators, dynamic chemical mixers, and tower and tank flow management products; tower management systems; turbo compressors, aeration systems, and mechanical aerators; cartridges, mixers, dispensers, and accessories; process solutions; medium consistency products; pumping solutions and auxiliary equipment; and control and monitoring equipment. The company also provides lifting stations; pump and lifting station accessories; products for distillation, absorption, stripping, evaporation, phase separation, liquid-liquid extraction, crystallization, and membrane separation; static mixers; submersible mixers; lube oil systems; and solids reduction, separation, and removal systems. In addition, it offers rotating equipment services; mass transfer equipment, welding, plant maintenance, and turnaround project services; feasibility and debottlenecking studies, process validations, and basic engineering services; packaging solutions for beauty products; spare parts; testing services; training services; and services for water, wastewater, and dewatering products, as well as operates services centers for rotating equipment. Sulzer Ltd was founded in 1834 and is headquartered in Winterthur, Switzerland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 20:47
End of Day Share Price2020/02/19 00:00
Earnings2019/06/30
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.