DB:7LI

Stock Analysis Report

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Executive Summary

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States.


Snowflake Analysis

Good value with proven track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 7LI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.3%

7LI

5.9%

DE Capital Markets

4.3%

DE Market


1 Year Return

-8.9%

7LI

22.3%

DE Capital Markets

0.3%

DE Market

Return vs Industry: 7LI underperformed the German Capital Markets industry which returned 22.6% over the past year.

Return vs Market: 7LI underperformed the German Market which returned -0.1% over the past year.


Shareholder returns

7LIIndustryMarket
7 Day6.3%5.9%4.3%
30 Day25.2%12.5%7.4%
90 Day-8.8%3.9%-0.2%
1 Year-7.5%-8.9%23.8%22.3%2.0%0.3%
3 Year106.8%97.4%-5.3%-9.2%-5.0%-12.3%
5 Year90.2%70.3%-26.2%-36.3%4.2%-9.2%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

25.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 7LI (€67) is trading below our estimate of fair value (€90.21)

Significantly Below Fair Value: 7LI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 7LI is good value based on its PE Ratio (10.5x) compared to the Capital Markets industry average (22.3x).

PE vs Market: 7LI is good value based on its PE Ratio (10.5x) compared to the German market (19x).


Price to Earnings Growth Ratio

PEG Ratio: 7LI's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 7LI is overvalued based on its PB Ratio (5.6x) compared to the DE Capital Markets industry average (2.2x).


Next Steps

Future Growth

How is LPL Financial Holdings forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

-6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7LI's earnings are forecast to decline over the next 3 years (-6.4% per year).

Earnings vs Market: 7LI's earnings are forecast to decline over the next 3 years (-6.4% per year).

High Growth Earnings: 7LI's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 7LI's revenue (6.4% per year) is forecast to grow faster than the German market (5.7% per year).

High Growth Revenue: 7LI's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 7LI's Return on Equity is forecast to be high in 3 years time (35.1%)


Next Steps

Past Performance

How has LPL Financial Holdings performed over the past 5 years?

29.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 7LI has high quality earnings.

Growing Profit Margin: 7LI's current net profit margins (9.8%) are higher than last year (9.4%).


Past Earnings Growth Analysis

Earnings Trend: 7LI's earnings have grown significantly by 29.7% per year over the past 5 years.

Accelerating Growth: 7LI's earnings growth over the past year (11.7%) is below its 5-year average (29.7% per year).

Earnings vs Industry: 7LI earnings growth over the past year (11.7%) exceeded the Capital Markets industry 4.1%.


Return on Equity

High ROE: Whilst 7LI's Return on Equity (55.38%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is LPL Financial Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 7LI's short term assets ($3.1B) exceed its short term liabilities ($965.0M).

Long Term Liabilities: 7LI's short term assets ($3.1B) do not cover its long term liabilities ($4.1B).


Debt to Equity History and Analysis

Debt Level: 7LI's debt to equity ratio (244%) is considered high.

Reducing Debt: 7LI's debt to equity ratio has increased from 167.9% to 244% over the past 5 years.

Debt Coverage: 7LI's debt is well covered by operating cash flow (39.3%).

Interest Coverage: 7LI's interest payments on its debt are well covered by EBIT (6.9x coverage).


Balance Sheet


Next Steps

Dividend

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

1.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 7LI's dividend (1.38%) is higher than the bottom 25% of dividend payers in the German market (1.32%).

High Dividend: 7LI's dividend (1.38%) is low compared to the top 25% of dividend payers in the German market (4.07%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 7LI has been paying a dividend for less than 10 years.

Growing Dividend: 7LI's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (14.5%), 7LI's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 7LI's dividends in 3 years are forecast to be well covered by earnings (17.6% payout ratio).


Next Steps

Management

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

3.1yrs

Average management tenure


CEO

Dan Arnold (55yo)

3.33yrs

Tenure

US$7,669,954

Compensation

Mr. Dan Hogan Arnold serves as President and Chief Executive Officer of LPL Financial Holdings Inc. (“LPL”) (NASDAQ: LPLA). In this role, he sets the strategy and direction for the LPL with the Board, whil ...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD7.67M) is above average for companies of similar size in the German market ($USD3.63M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Dan Arnold
President3.33yrsUS$7.67m0.26% $13.6m
Matthew Audette
Chief Financial Officer4.67yrsUS$3.32m0.025% $1.3m
Scott Seese
MD & Chief Information Officer2.83yrsUS$2.78m0.019% $967.0k
Richard Steinmeier
MD & Divisional President of Business Development1.75yrsUS$2.22m0.0069% $357.4k
Dayton Semerjian
MD & Chief Customer Care Officer1.25yrsUS$2.41m0.0044% $229.9k
Judy Ricketts
Executive Vice President of Operations0.083yrno datano data
George White
MD of Investor & Investment Solutions and Chief Investment Officer13.33yrsUS$2.16m0.039% $2.1m
Chris Koegel
Senior Vice President of Investor Relations5.33yrsno datano data
Michelle Oroschakoff
MD & Chief Legal Officer2.92yrsUS$1.84m0.018% $928.5k
Sallie Larsen
MD & Chief Human Capital Officer8.33yrsUS$1.11m0.025% $1.3m

3.1yrs

Average Tenure

51.5yo

Average Age

Experienced Management: 7LI's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dan Arnold
President3.33yrsUS$7.67m0.26% $13.6m
Richard Schifter
Independent Director14.58yrsUS$277.78k0.062% $3.2m
Edward Bernard
Independent Directorno datano data0.0063% $329.8k
William Glavin
Independent Director3yrsUS$282.78k0.021% $1.1m
Anne Mulcahy
Independent Director7yrsUS$292.78k0.038% $2.0m
H. Eberhart
Independent Director5.5yrsUS$281.30k0.025% $1.3m
James Putnam
Independent Non-Executive Chairman3.17yrsUS$388.59k0.17% $8.7m
Corey Thomas
Independent Director1yrUS$266.53k0.0094% $487.9k
Allison Mnookin
Independent Director1.92yrsUS$270.88k0.0089% $460.9k

3.3yrs

Average Tenure

63yo

Average Age

Experienced Board: 7LI's board of directors are considered experienced (3.3 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

LPL Financial Holdings Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LPL Financial Holdings Inc.
  • Ticker: 7LI
  • Exchange: DB
  • Founded: 1989
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$5.712b
  • Listing Market Cap: US$5.202b
  • Shares outstanding: 78.86m
  • Website: https://www.lpl.com

Number of Employees


Location

  • LPL Financial Holdings Inc.
  • 4707 Executive Drive
  • San Diego
  • California
  • 92121
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LPLANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 2010
7LIDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2010

Biography

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and business development companies. The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers cash sweep programs; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/28 23:05
End of Day Share Price2020/05/28 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.