DB:YSON

Stock Analysis Report

Executive Summary

Sonae, SGPS, S.A. engages in retail, financial services, technology, shopping center, and telecommunication businesses.

Rewards

Trading at 2.3% below its fair value

Earnings grew by 35.3% over the past year

Pays a high and reliable dividend of 4.96%

Risk Analysis

Earnings are forecast to decline by an average of -3.7% per year for the next 3 years

Interest payments are not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

6 star dividend payer and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.1%

YSON

0.1%

DE Consumer Retailing

0.07%

DE Market


1 Year Return

-0.9%

YSON

2.2%

DE Consumer Retailing

14.8%

DE Market

Return vs Industry: YSON underperformed the German Consumer Retailing industry which returned 4.8% over the past year.

Return vs Market: YSON underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

YSONIndustryMarket
7 Day-1.1%0.1%0.07%
30 Day-3.9%-0.9%1.4%
90 Day-1.8%0.3%6.1%
1 Year4.3%-0.9%6.2%2.2%18.4%14.8%
3 Year15.8%1.5%3.3%-7.0%17.4%7.0%
5 Year-8.9%-25.3%9.5%-7.3%27.9%10.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

2.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: YSON (€0.87) is trading below our estimate of fair value (€0.89)

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


Price To Earnings Ratio

PE vs Industry: YSON is good value based on its PE Ratio (8.6x) compared to the Consumer Retailing industry average (19.2x).

PE vs Market: YSON is good value based on its PE Ratio (8.6x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: YSON's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: YSON is good value based on its PB Ratio (0.8x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is Sonae SGPS forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-3.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: YSON's earnings are forecast to decline over the next 3 years (-3.7% per year).

Earnings vs Market: YSON's earnings are forecast to decline over the next 3 years (-3.7% per year).

High Growth Earnings: YSON's earnings are forecast to decline over the next 3 years.

Revenue vs Market: YSON's revenue (4.5% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: YSON's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: YSON's Return on Equity is forecast to be low in 3 years time (5.8%).


Next Steps

Past Performance

How has Sonae SGPS performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: YSON has a large one-off gain of €73.1M impacting its September 30 2019 financial results.

Growing Profit Margin: YSON's current net profit margins (3%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: YSON's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: YSON's earnings growth over the past year (35.3%) exceeds its 5-year average (4.9% per year).

Earnings vs Industry: YSON earnings growth over the past year (35.3%) exceeded the Consumer Retailing industry 0.5%.


Return on Equity

High ROE: YSON's Return on Equity (8.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sonae SGPS's financial position?


Financial Position Analysis

Short Term Liabilities: YSON's short term assets (€1.8B) do not cover its short term liabilities (€2.2B).

Long Term Liabilities: YSON's short term assets (€1.8B) do not cover its long term liabilities (€3.6B).


Debt to Equity History and Analysis

Debt Level: YSON's debt to equity ratio (73.3%) is considered high.

Reducing Debt: YSON's debt to equity ratio has reduced from 106.5% to 73.3% over the past 5 years.

Debt Coverage: YSON's debt is not well covered by operating cash flow (19%).

Interest Coverage: YSON's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: YSON's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

5.00%

Current Dividend Yield


Dividend Yield vs Market

company5.0%marketbottom25%1.4%markettop25%3.5%industryaverage3.5%forecastin3Years5.6%

Current dividend yield vs market & industry

Notable Dividend: YSON's dividend (4.96%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: YSON's dividend (4.96%) is in the top 25% of dividend payers in the German market (3.53%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.9%), YSON's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: YSON's dividends in 3 years are forecast to be covered by earnings (65.5% payout ratio).


Next Steps

Management

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

0.8yrs

Average management tenure


CEO

Maria Cláudia de Azevedo (49yo)

1yrs

Tenure

0

Ms. Maria Cláudia Teixeira de Azevedo serves as the Chief Executive Officer of Software & Technology and Onine & Media at Sonaecom, S.G.P.S., S.A. Ms. de Azevedo has been the Chief Executive Officer of Son ...


Management Age and Tenure

0.8yrs

Average Tenure

Experienced Management: YSON's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

2.4yrs

Average Tenure

60yo

Average Age

Experienced Board: YSON's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Insider Trading

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.


Management Team

  • Luzia Leonor Gomes e Ferreira

    Head of General Counsel & Corporate Governance and Company Secretary

    • José Côrte-Real

      Head of Human Resources

      • Maria Cláudia de Azevedo (49yo)

        CEO & Director

        • Tenure: 1yrs
      • Luis Miguel Mesquita Moutinho

        Sonae MC CEO & Director

        • David Pedro Parente Ferreira Alves

          Senior Executive and Head of Tax Management

          • Catarina Fernandes

            Head of Communication

            • Patrícia Pinto

              Head of Investor Relations

              • Nuno Gama

                Head of Innovation & Future Tech

                • João Pedro Magalhaes Da Silva Dolores

                  CFO & Director

                  • João Amaral

                    Chief Development Officer

                    • Tenure: 0.8yrs

                  Board Members

                  • José Manuel Tromdade Adelino (65yo)

                    Non-Executive Director

                    • Tenure: 13yrs
                    • Compensation: €66.90k
                  • Ângelo Gabriel Dos Santos Paupério (60yo)

                    Non-Executive Director

                    • Tenure: 20yrs
                    • Compensation: €724.50k
                  • Duarte Paulo de Azevedo (54yo)

                    Chairman

                    • Tenure: 0.7yrs
                    • Compensation: €659.90k
                  • Margaret Trainer (67yo)

                    Non-Executive Director

                    • Tenure: 4.1yrs
                    • Compensation: €54.50k
                  • Maria Cláudia de Azevedo (49yo)

                    CEO & Director

                    • Tenure: 1yrs
                  • Marcelo De Lima (58yo)

                    Non-Executive Director

                    • Tenure: 0.7yrs
                    • Compensation: €51.40k
                  • Luis Miguel Mesquita Moutinho

                    Sonae MC CEO & Director

                    • José Manuel Fortunato

                      Director

                      • Maria José Martins Lourenço Fonseca (62yo)

                        Chair of Statutory Audit Board

                        • Tenure: 0.7yrs
                      • João Pedro Magalhaes Da Silva Dolores

                        CFO & Director

                        Company Information

                        Sonae, SGPS, S.A.'s company bio, employee growth, exchange listings and data sources


                        Key Information

                        • Name: Sonae, SGPS, S.A.
                        • Ticker: YSON
                        • Exchange: DB
                        • Founded: 1959
                        • Industry: Food Retail
                        • Sector: Consumer Retailing
                        • Market Cap: €1.655b
                        • Shares outstanding: 1.88b
                        • Website: https://www.sonae.pt

                        Number of Employees


                        Location

                        • Sonae, SGPS, S.A.
                        • Lugar do Espido
                        • Via Norte
                        • Maia
                        • Norte
                        • 4471-909
                        • Portugal

                        Listings

                        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                        YSONDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
                        SONENXTLS (Euronext Lisbon)YesOrdinary SharesPTEURJan 1992
                        SOSS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
                        0ML0LSE (London Stock Exchange)YesOrdinary SharesGBEURJan 1992
                        SONUBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBEURJan 1992

                        Biography

                        Sonae, SGPS, S.A. engages in retail, financial services, technology, shopping center, and telecommunication businesses. The company operates hypermarkets under the Continente brand; convenience supermarkets under the Continente Modelo and Continente Bom Dia brands; franchised supermarkets under the Meu Super brand; cafeteria/restaurants under the Bom Bocado and Bagga brands; healthy food supermarkets and restaurants under the Go Natural brand; book shops and stationery under the Make Notes and Note! brands; health, well-being, and eye care centers under the Well´s brand; and dental and aesthetic medicine clinics under the Dr. Well’s brand, as well as provides dog and cat products and services under the ZU brand. It also sells sportswear apparel and footwear under the Sprinter brand; clothing, footwear, and accessories under the MO brands; baby and children clothing, footwear, and accessories, as well as childcare products under the Zippy and Losan brands; and jeans, clothing, and accessories under the Salsa brand. In addition, the company sells consumer electronics and entertainment products under the Worten brand; and mobile telecommunications products under the Worten Mobile brand, as well as manages a portfolio of retail real estate properties. Further, it engages in the investment management activities; and the provision of financial services, including money transfer, store credit, and insurance brokerage services, as well as various cards. Further, it owns, manages, and leases shopping centers; and provides telecommunication services to residential, personal, corporate, and wholesale markets. The company operates in Portugal, Spain, France, the United Kingdom, Germany, Italy, Romania, Brazil, Mexico, the Netherlands, and internationally. Sonae, SGPS, S.A. was founded in 1959 and is headquartered in Maia, Portugal. 


                        Company Analysis and Financial Data Status

                        All financial data provided by Standard & Poor's Capital IQ.
                        DataLast Updated (UTC time)
                        Company Analysis2020/01/19 20:38
                        End of Day Share Price2020/01/17 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.