DB:2R8

Stock Analysis Report

Ritchie Bros. Auctioneers

Executive Summary

Ritchie Bros. Auctioneers Incorporated, an asset management and disposition company, sells industrial equipment and other durable assets through its unreserved live on site auctions, online marketplaces, listing services, and private brokerage services.

Rewards

Trading at 1.8% below its fair value

Earnings are forecast to grow 17.63% per year

Earnings grew by 8.3% over the past year

Pays a high and reliable dividend of 1.8%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Ritchie Bros. Auctioneers's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2R8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.5%

2R8

-1.5%

DE Commercial Services

-2.4%

DE Market


1 Year Return

22.7%

2R8

5.2%

DE Commercial Services

11.8%

DE Market

Return vs Industry: 2R8 exceeded the German Commercial Services industry which returned 9.1% over the past year.

Return vs Market: 2R8 exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

2R8IndustryMarket
7 Day-2.5%-1.5%-2.4%
30 Day0%-4.1%-1.1%
90 Day6.6%6.2%3.0%
1 Year25.3%22.7%9.0%5.2%15.3%11.8%
3 Year36.8%28.3%5.6%-3.6%14.4%4.4%
5 Year96.0%75.9%6.8%-8.2%23.8%7.0%

Price Volatility Vs. Market

How volatile is Ritchie Bros. Auctioneers's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Ritchie Bros. Auctioneers undervalued compared to its fair value and its price relative to the market?

1.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2R8 (€39) is trading below our estimate of fair value (€39.7)

Significantly Below Fair Value: 2R8 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 2R8 is poor value based on its PE Ratio (36.3x) compared to the Commercial Services industry average (32.4x).

PE vs Market: 2R8 is poor value based on its PE Ratio (36.3x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: 2R8 is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: 2R8 is overvalued based on its PB Ratio (5.7x) compared to the DE Commercial Services industry average (3.2x).


Next Steps

Future Growth

How is Ritchie Bros. Auctioneers forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2R8's forecast earnings growth (17.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: 2R8's earnings (17.6% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: 2R8's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2R8's revenue (3.8% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: 2R8's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 2R8's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Ritchie Bros. Auctioneers performed over the past 5 years?

1.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2R8 has high quality earnings.

Growing Profit Margin: 2R8's current net profit margins (9.9%) are lower than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: 2R8's earnings have grown by 1.7% per year over the past 5 years.

Accelerating Growth: 2R8's earnings growth over the past year (8.3%) exceeds its 5-year average (1.7% per year).

Earnings vs Industry: 2R8 earnings growth over the past year (8.3%) exceeded the Commercial Services industry 6.2%.


Return on Equity

High ROE: 2R8's Return on Equity (15.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Ritchie Bros. Auctioneers's financial position?


Financial Position Analysis

Short Term Liabilities: 2R8's short term assets ($809.3M) exceed its short term liabilities ($660.0M).

Long Term Liabilities: 2R8's short term assets ($809.3M) do not cover its long term liabilities ($854.6M).


Debt to Equity History and Analysis

Debt Level: 2R8's debt to equity ratio (82.4%) is considered high.

Reducing Debt: 2R8's debt to equity ratio has increased from 22.5% to 82.4% over the past 5 years.

Debt Coverage: 2R8's debt is well covered by operating cash flow (51.2%).

Interest Coverage: 2R8's interest payments on its debt are well covered by EBIT (4.8x coverage).


Balance Sheet

Inventory Level: 2R8 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2R8's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Ritchie Bros. Auctioneers's current dividend yield, its reliability and sustainability?

1.84%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.6%industryaverage3.4%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: 2R8's dividend (1.8%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: 2R8's dividend (1.8%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: 2R8's dividends per share have been stable in the past 10 years.

Growing Dividend: 2R8's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (62%), 2R8's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2R8's dividends in 3 years are forecast to be covered by earnings (52.3% payout ratio).


Next Steps

Management

What is the CEO of Ritchie Bros. Auctioneers's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Ann Fandozzi (48yo)

0yrs

Tenure

0

Ms. Ann M. Fandozzi serves as Chief Executive Officer & Director at Ritchie Bros. Auctioneers Incorporated since January 6, 2020. She has been the President of ABRA Auto Body & Glass LP since October 10, 2 ...


Management Age and Tenure

4.5yrs

Average Tenure

54yo

Average Age

Experienced Management: 2R8's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

60.5yo

Average Age

Experienced Board: 2R8's board of directors are considered experienced (4.5 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

Sell€87,46406 Sep 19
Todd Wohler
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares2,428
Max Price€36.02
Sell€71,73621 Aug 19
Todd Wohler
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares2,000
Max Price€35.87
Sell€71,21120 Aug 19
Todd Wohler
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares2,000
Max Price€35.61
Sell€6914 Aug 19
Todd Wohler
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares2
Max Price€34.26

Ownership Breakdown

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


Management Team

  • Jeff Jeter (60yo)

    President of Upstream & Emerging Businesses - North America

    • Tenure: 2.6yrs
    • Compensation: US$1.10m
  • Matt Ackley (51yo)

    Chief Marketing Officer

    • Tenure: 1yrs
  • Dave Ritchie

    Founder and Chairman Emeritus

    • Tenure: 13.2yrs
    • Compensation: US$142.50k
  • Ann Fandozzi (48yo)

    CEO & Director

    • Curt Hinkelman

      Senior Vice President of Sales - Eastern USA

      • Karl Werner (54yo)

        President of International

        • Compensation: US$1.18m
      • Sharon Driscoll (57yo)

        Chief Financial Officer

        • Tenure: 4.5yrs
        • Compensation: US$1.67m
      • Darren Watt (47yo)

        Senior VP

        • Tenure: 7yrs
      • Todd Wohler (60yo)

        Chief Human Resources Officer

        • Tenure: 5yrs
        • Compensation: US$1.21m
      • Zaheed Mawani

        Vice President of Investor Relations


        Board Members

        • Sarah Raiss (62yo)

          Independent Director

          • Tenure: 3.5yrs
          • Compensation: US$215.34k
        • Dave Ritchie

          Founder and Chairman Emeritus

          • Tenure: 13.2yrs
          • Compensation: US$142.50k
        • Chris Zimmerman (59yo)

          Independent Director

          • Tenure: 11.8yrs
          • Compensation: US$204.03k
        • Bob Elton (67yo)

          Independent Director

          • Tenure: 7.8yrs
          • Compensation: US$223.31k
        • J. Fennell (62yo)

          Independent Director

          • Tenure: 2.5yrs
          • Compensation: US$193.78k
        • Bev Briscoe (64yo)

          Chair of the Board

          • Tenure: 5.6yrs
          • Compensation: US$362.27k
        • Erik Olsson (57yo)

          Independent Vice Chairman

          • Tenure: 0.4yrs
          • Compensation: US$206.04k
        • Ann Fandozzi (48yo)

          CEO & Director

          • Amy Shenkan (54yo)

            Independent Director

            • Tenure: 2.5yrs
            • Compensation: US$194.53k

          Company Information

          Ritchie Bros. Auctioneers Incorporated's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Ritchie Bros. Auctioneers Incorporated
          • Ticker: 2R8
          • Exchange: DB
          • Founded: 1958
          • Industry: Diversified Support Services
          • Sector: Commercial Services
          • Market Cap: US$4.742b
          • Listing Market Cap: US$4.303b
          • Shares outstanding: 109.34m
          • Website: https://www.rbauction.com

          Number of Employees


          Location

          • Ritchie Bros. Auctioneers Incorporated
          • 9500 Glenlyon Parkway
          • Burnaby
          • British Columbia
          • V5J 0C6
          • Canada

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          RBANYSE (New York Stock Exchange)YesCommon SharesUSUSDMar 1998
          RBATSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 1998
          2R8DB (Deutsche Boerse AG)YesCommon SharesDEEURMar 1998

          Biography

          Ritchie Bros. Auctioneers Incorporated, an asset management and disposition company, sells industrial equipment and other durable assets through its unreserved live on site auctions, online marketplaces, listing services, and private brokerage services. The company sells a range of used and unused equipment, including earthmoving equipment, truck trailers, government surplus, oil and gas equipment, and other industrial assets, as well as construction and heavy machinery. It also offers live auction events with online bidding. The company sells used equipment to its customers through live, unreserved auctions at 40 auction sites worldwide. It serves construction, transportation, agriculture, energy, oil and gas, mining, and forestry sectors. The company operates in the United States, Canada, Australia, the United Arab Emirates, the Netherlands, and internationally. Ritchie Bros. Auctioneers Incorporated was founded in 1958 and is headquartered in Burnaby, Canada. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/27 22:00
          End of Day Share Price2020/01/27 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.