DB:HY7

Stock Analysis Report

Executive Summary

Shoprite Holdings Limited, an investment holding company, primarily engages in the food retailing business.


Snowflake Analysis

Good value average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: HY7 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.1%

HY7

1.2%

DE Consumer Retailing

-0.2%

DE Market


1 Year Return

-31.5%

HY7

2.8%

DE Consumer Retailing

13.7%

DE Market

Return vs Industry: HY7 underperformed the German Consumer Retailing industry which returned 2.8% over the past year.

Return vs Market: HY7 underperformed the German Market which returned 13.7% over the past year.


Shareholder returns

HY7IndustryMarket
7 Day-2.1%1.2%-0.2%
30 Day-2.8%2.8%0.3%
90 Day-16.0%2.4%3.7%
1 Year-29.9%-31.5%6.8%2.8%17.2%13.7%
3 Year-46.5%-50.1%7.3%-3.4%15.4%5.3%
5 Year-39.4%-46.2%9.5%-7.3%21.3%4.7%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

42.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HY7 (€6.85) is trading below our estimate of fair value (€11.92)

Significantly Below Fair Value: HY7 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HY7 is good value based on its PE Ratio (14.3x) compared to the Consumer Retailing industry average (21x).

PE vs Market: HY7 is good value based on its PE Ratio (14.3x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: HY7 is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: HY7 is overvalued based on its PB Ratio (2.3x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

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

4.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HY7's forecast earnings growth (4.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: HY7's earnings (4.9% per year) are forecast to grow slower than the German market (13.1% per year).

High Growth Earnings: HY7's earnings are forecast to grow, but not significantly.

Revenue vs Market: HY7's revenue (6.1% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: HY7's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HY7's Return on Equity is forecast to be low in 3 years time (15.5%).


Next Steps

Past Performance

How has Shoprite Holdings performed over the past 5 years?

5.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HY7 has a high level of non-cash earnings.

Growing Profit Margin: HY7's current net profit margins (2.8%) are lower than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: HY7's earnings have grown by 5.1% per year over the past 5 years.

Accelerating Growth: HY7's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HY7 had negative earnings growth (-18.3%) over the past year, making it difficult to compare to the Consumer Retailing industry average (2%).


Return on Equity

High ROE: HY7's Return on Equity (16.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Shoprite Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: HY7's short term assets (ZAR34.8B) exceed its short term liabilities (ZAR27.6B).

Long Term Liabilities: HY7's short term assets (ZAR34.8B) exceed its long term liabilities (ZAR11.2B).


Debt to Equity History and Analysis

Debt Level: HY7's debt to equity ratio (60.5%) is considered high.

Reducing Debt: HY7's debt to equity ratio has increased from 27.6% to 60.5% over the past 5 years.

Debt Coverage: HY7's debt is not well covered by operating cash flow (19.4%).

Interest Coverage: HY7 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: HY7 has a high level of physical assets or inventory.

Debt Coverage by Assets: HY7's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

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

2.91%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%1.3%markettop25%3.7%industryaverage3.7%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: HY7's dividend (2.91%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: HY7's dividend (2.91%) is low compared to the top 25% of dividend payers in the German market (3.65%).


Stability and Growth of Payments

Stable Dividend: HY7's dividend payments have been volatile in the past 10 years.

Growing Dividend: HY7's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.5%), HY7's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HY7's dividends in 3 years are forecast to be covered by earnings (52.4% payout ratio).


Next Steps

Management

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

3.1yrs

Average board tenure


CEO

Pieter Engelbrecht (50yo)

3.1yrs

Tenure

R21,271,000

Compensation

Mr. Pieter C. Engelbrecht, BCompt Hons CA(SA), has been the Chief Executive Officer and Executive Director of Shoprite Holdings Limited since January 1, 2017. Mr. Engelbrecht served as the Chief Operating ...


CEO Compensation Analysis

Compensation vs Market: Pieter's total compensation ($USD1.40M) is below average for companies of similar size in the German market ($USD2.27M).

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


Board Members

NamePositionTenureCompensationOwnership
Pieter Engelbrecht
CEO & Executive Director3.1yrsR21.27m0.11% ZAR4.2m
Anton de Bruyn
CFO & Executive Director1.6yrsR6.74m0.0053% ZAR198.2k
B. Harisunker
Divisional Manager & Executive Director17.3yrsR5.72m0.079% ZAR2.9m
Anna Theresa Mokgokong
Lead Independent Director0.3yrsR623.00kno data
Christoffel F. Wiese
Non-Executive Chairman29.1yrsR1.21m11.4% ZAR423.8m
Jacob Wiese
Non-Executive Alternate Director15.1yrsno data0.0027% ZAR98.5k
Joseph Rock
Independent Non-Executive Director7.8yrsR603.00kno data
Johannes Basson
Independent Non-Executive Director1.3yrsR749.00k0.00018% ZAR6.7k
Alice le Roux
Independent Non-Executive Director1.3yrsR353.00k0.0025% ZAR94.1k

3.1yrs

Average Tenure

50yo

Average Age

Experienced Board: HY7's board of directors are considered experienced (3.1 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: HY7 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: Shoprite Holdings Limited
  • Ticker: HY7
  • Exchange: DB
  • Founded: 1979
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: R60.817b
  • Listing Market Cap: R3.718b
  • Shares outstanding: 554.40m
  • Website: https://www.shopriteholdings.co.za

Number of Employees


Location

  • Shoprite Holdings Limited
  • Cnr William Dabbs Street and Old Paarl Road
  • Brackenfell
  • Western Cape
  • 7560
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHOPRITELUSE (Lusaka Stock Exchange)YesOrdinary SharesZMZMWJul 1992
SRHNMSE (Namibian Stock Exchange)YesOrdinary SharesNAZARJul 1992
SHPJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARJul 1992
SRHG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 1992
HY7DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 1992
SRGH.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 2008
HY7ADB (Deutsche Boerse AG)SPONSORED ADRDEEUROct 2008

Biography

Shoprite Holdings Limited, an investment holding company, primarily engages in the food retailing business. The company operates through four segments: Supermarkets RSA, Supermarkets Non-RSA, Furniture, and Other Operating segments. It also offers clothing, general merchandise, furniture, bedding, loose carpeting, home entertainment, and floor covering products; and cosmetics, liquors, electrical and household appliances, and soft furnishings. As of June 30, 2019, the company operated 665 Shoprite supermarkets; 228 Checkers supermarkets; 37 Checkers Hyper supermarkets; 424 Usave supermarkets; 417 OK Furniture outlets; 48 House & Home outlets; 490 liquor shops under the Shoprite LiquorShop and Checkers LiquorShop brand names; and 460 franchise stores under the OK Foods, OK Grocer, OK MiniMark, OK Express, Megasave, OK Liquor, and Sentra brand names, as well as operates 155 MediRite pharmacies within stores. In addition, the company distributes various pharmaceutical products and surgical equipment to pharmacies, hospitals, clinics, dispensing doctors, and veterinary surgeons. Further, it operates under the OK Power Express brand name. Additionally, the company provides ticketing, and car rental and accommodation services; stadium management, capacity management, travel management, and access control solutions; and short-term insurance and treasury management services. The company operates in South Africa and 14 other African countries. Shoprite Holdings Limited was founded in 1979 and is based in Brackenfell, South Africa. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 22:09
End of Day Share Price2020/02/20 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.