BST:NH7

Stock Analysis Report

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Executive Summary

Netcare Limited operates private hospitals in South Africa and Lesotho.


Snowflake Analysis

Undervalued with moderate growth potential.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: NH7 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-10.4%

NH7

-1.8%

DE Healthcare

-1.6%

DE Market


1 Year Return

-30.9%

NH7

8.5%

DE Healthcare

8.3%

DE Market

Return vs Industry: NH7 underperformed the German Healthcare industry which returned 3.9% over the past year.

Return vs Market: NH7 underperformed the German Market which returned 3.7% over the past year.


Shareholder returns

NH7IndustryMarket
7 Day-10.4%-1.8%-1.6%
30 Day-7.2%-3.4%0.2%
90 Day-12.8%6.8%12.8%
1 Year-28.5%-30.9%8.5%8.5%10.7%8.3%
3 Year-51.3%-57.8%-19.5%-22.1%3.8%-4.5%
5 Year-71.5%-76.9%-16.6%-20.4%9.6%-5.2%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

30.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NH7 (€0.65) is trading below our estimate of fair value (€0.92)

Significantly Below Fair Value: NH7 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NH7 is good value based on its PE Ratio (9.4x) compared to the DE Healthcare industry average (23.9x).

PE vs Market: NH7 is good value based on its PE Ratio (9.4x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: NH7 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: NH7 is overvalued based on its PB Ratio (1.9x) compared to the DE Healthcare industry average (1.3x).


Next Steps

Future Growth

How is Netcare forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

20.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NH7's forecast earnings growth (20.2% per year) is above the savings rate (0.2%).

Earnings vs Market: NH7's earnings (20.2% per year) are forecast to grow slower than the German market (23.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NH7's revenue (8.3% per year) is forecast to grow faster than the German market (5.8% per year).

High Growth Revenue: NH7's revenue (8.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NH7's Return on Equity is forecast to be low in 3 years time (17.2%).


Next Steps

Past Performance

How has Netcare performed over the past 5 years?

-1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NH7 has high quality earnings.

Growing Profit Margin: NH7's current net profit margins (8.7%) are lower than last year (10%).


Past Earnings Growth Analysis

Earnings Trend: NH7's earnings have declined by 1.1% per year over the past 5 years.

Accelerating Growth: NH7's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NH7 had negative earnings growth (-10.3%) over the past year, making it difficult to compare to the Healthcare industry average (26.8%).


Return on Equity

High ROE: NH7's Return on Equity (19.9%) is considered low.


Next Steps

Financial Health

How is Netcare's financial position?


Financial Position Analysis

Short Term Liabilities: NH7's short term assets (ZAR7.1B) exceed its short term liabilities (ZAR6.6B).

Long Term Liabilities: NH7's short term assets (ZAR7.1B) do not cover its long term liabilities (ZAR10.0B).


Debt to Equity History and Analysis

Debt Level: NH7's debt to equity ratio (81.6%) is considered high.

Reducing Debt: NH7's debt to equity ratio has increased from 59.2% to 81.6% over the past 5 years.

Debt Coverage: NH7's debt is well covered by operating cash flow (34.1%).

Interest Coverage: NH7's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet


Next Steps

Dividend

What is Netcare current dividend yield, its reliability and sustainability?

4.44%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NH7's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NH7's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NH7's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NH7's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: NH7 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NH7's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

3.7yrs

Average management tenure


CEO

Richard Friedland (59 yo)

14.92yrs

Tenure

R12,084,000

Compensation

Dr. Richard Harold Friedland, BvSc, MBBCh, Dip Fin Man, MBA has been the Group Chief Executive Officer of Netcare Limited since September 1, 2005. Dr. Friedland has been an Executive Director at Netcare Li ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD711.77K) is below average for companies of similar size in the German market ($USD1.31M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Richard Friedland
Group CEO & Executive Director14.92yrsR12.08m0.0091%
ZAR 80.2k
Keith Gibson
Group CFO & Executive Director8.75yrsR6.07m0.032%
ZAR 279.0k
Jacques du Plessis
Managing Director of Hospitalsno dataR5.40m0.0060%
ZAR 52.4k
Craig Grindell
Managing Director of Netcare 9113.25yrsR4.13mno data
Billyy van der Merwe
Managing Director of Primary Care3yrsR4.44mno data
Sandile Mhlongo
Managing Director of Akeso Clinics1.25yrsR2.88mno data
Stefan Andrejczuk
Chief Operating Officer3.67yrsno datano data
Travis Dewing
Chief Information Officerno datano datano data
Peter Warrener
Group Human Resources Director13.58yrsR1.49mno data
Teshlin Akaloo
Managing Director of Innovative Products0.58yrno datano data
Melanie Da Costa
Director of Strategy & Health Policyno datano datano data
Henry Davies
Chief Financial Officer – United Kingdom4.92yrsR343.96kno data

3.7yrs

Average Tenure

51yo

Average Age

Experienced Management: NH7's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Friedland
Group CEO & Executive Director14.92yrsR12.08m0.0091%
ZAR 80.2k
Keith Gibson
Group CFO & Executive Director8.75yrsR6.07m0.032%
ZAR 279.0k
Norman Weltman
Independent Non-Executive Director20.75yrsR1.51m0.00074%
ZAR 6.5k
Kgomotso Moroka
Independent Non-Executive Director14.08yrsR990.00kno data
Martin Kuscus
Independent Non-Executive Director12.08yrsR1.16mno data
Thevendrie Brewer
Independent Chairperson2.33yrsR2.18mno data
Bukelwa Bulo
Independent Non-Executive Director4.75yrsR1.17mno data
Mark Bower
Independent Non-Executive Director4.75yrsR1.36mno data
Lezanne Human
Independent Non-Executive Director1.25yrsR405.00kno data

8.8yrs

Average Tenure

59yo

Average Age

Experienced Board: NH7's board of directors are considered experienced (8.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: NH7 insiders have bought more shares than they have sold 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

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


Key Information

  • Name: Netcare Limited
  • Ticker: NH7
  • Exchange: BST
  • Founded: 1996
  • Industry: Health Care Facilities
  • Sector: Healthcare
  • Market Cap: R17.693b
  • Listing Market Cap: R880.941m
  • Shares outstanding: 1.34b
  • Website: https://www.netcare.co.za

Number of Employees


Location

  • Netcare Limited
  • 76 Maude Street
  • Corner West Street
  • Sandton
  • Gauteng
  • 2196
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTCJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARDec 1996
NH7BST (Boerse-Stuttgart)YesOrdinary SharesDEEURDec 1996
NTCPJSE (The Johannesburg Securities Exchange)NON-RED NON-PART NON-CNV PREF ZAR0.50ZAZARJul 2006
NWKH.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDJan 2010

Biography

Netcare Limited operates private hospitals in South Africa and Lesotho. The company operates through Hospital and Emergency Services and Primary Care segments. It provides hospital, healthcare, and renal c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/04 20:38
End of Day Share Price2020/08/03 00:00
Earnings2020/03/31
Annual Earnings2019/09/30


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.