DB:LA6A

Stock Analysis Report

Executive Summary

Sanlam Limited provides various financial solutions to individual, business, and institutional clients.

Rewards

Trading at 22.8% below its fair value

Earnings are forecast to grow 11.66% per year

Pays a high and reliable dividend of 3.95%

Risk Analysis

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

6 star dividend payer and fair value.


Similar Companies

Momentum Metropolitan Holdings

JSE:MTM

Share Price & News

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


Latest Share Price and Events

Stable Share Price: LA6A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.5%

LA6A

0.4%

DE Insurance

0.07%

DE Market


1 Year Return

-10.0%

LA6A

27.1%

DE Insurance

14.8%

DE Market

Return vs Industry: LA6A underperformed the German Insurance industry which returned 29.2% over the past year.

Return vs Market: LA6A underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

LA6AIndustryMarket
7 Day-2.5%0.4%0.07%
30 Day-5.7%0.3%1.4%
90 Day0.4%4.3%6.1%
1 Year-6.1%-10.0%32.7%27.1%18.4%14.8%
3 Year22.2%8.3%64.7%44.8%17.4%7.0%
5 Year12.1%-7.1%95.1%56.2%27.9%10.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

24.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LA6A (€4.78) is trading below our estimate of fair value (€6.2)

Significantly Below Fair Value: LA6A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LA6A is poor value based on its PE Ratio (16.3x) compared to the Insurance industry average (11.9x).

PE vs Market: LA6A is good value based on its PE Ratio (16.3x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: LA6A is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LA6A is overvalued based on its PB Ratio (2.5x) compared to the DE Insurance industry average (1.1x).


Next Steps

Future Growth

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

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LA6A's forecast earnings growth (11.7% per year) is above the savings rate (-0.4%).

Earnings vs Market: LA6A's earnings (11.7% per year) are forecast to grow slower than the German market (13.2% per year).

High Growth Earnings: LA6A's earnings are forecast to grow, but not significantly.

Revenue vs Market: LA6A's revenue is expected to decline over the next 3 years (-11.1% per year).

High Growth Revenue: LA6A's revenue is forecast to decline over the next 3 years (-11.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LA6A's Return on Equity is forecast to be low in 3 years time (15.2%).


Next Steps

Past Performance

How has Sanlam performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LA6A has a large one-off gain of ZAR3.0B impacting its June 30 2019 financial results.

Growing Profit Margin: LA6A's current net profit margins (8.6%) are lower than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: LA6A's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: LA6A's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LA6A had negative earnings growth (-9.8%) over the past year, making it difficult to compare to the Insurance industry average (7.8%).


Return on Equity

High ROE: LA6A's Return on Equity (14.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sanlam's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: LA6A has a low level of unsold assets or inventory.

Debt Coverage by Assets: LA6A's debt is covered by short term assets (assets are 11.1x debt).


Financial Institutions Analysis

Asset Level: LA6A's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if LA6A has a sufficient allowance for bad loans.

Low Risk Liabilities: LA6A reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if LA6A has an acceptable proportion of non-loan assets held.

Low Risk Deposits: LA6A has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if LA6A has an appropriate level of bad loans.


Next Steps

Dividend

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

4.02%

Current Dividend Yield


Dividend Yield vs Market

company4.0%marketbottom25%1.4%markettop25%3.5%industryaverage3.7%forecastin3Years4.7%

Current dividend yield vs market & industry

Notable Dividend: LA6A's dividend (3.95%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: LA6A's dividend (3.95%) is in the top 25% of dividend payers in the German market (3.53%)


Stability and Growth of Payments

Stable Dividend: LA6A's dividends per share have been stable in the past 10 years.

Growing Dividend: LA6A's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.5%), LA6A's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LA6A's dividends in 3 years are forecast to be covered by earnings (66.8% payout ratio).


Next Steps

Management

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

4.8yrs

Average management tenure


CEO

Ian Kirk (61yo)

4.5yrs

Tenure

R22,521,000

Compensation

Mr. Ian Maxwell Kirk, FCA ( Ireland), CA(SA), HD ip BDP (Wits), has been the Group Chief Executive Officer and Executive Director of Sanlam Limited since July 1, 2015. Mr. Kirk has been Group Chief Executi ...


CEO Compensation Analysis

Compensation vs Market: Ian's total compensation ($USD0.00) is below average for companies of similar size in the German market ($USD4.52M).

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


Management Age and Tenure

4.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: LA6A's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

62yo

Average Age

Experienced Board: LA6A's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: LA6A insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sell€324,52718 Dec 19
Temba Mvusi
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares64,045
Max Price€5.07
Sell€7,250,72613 Nov 19
Johan van Zyl
EntityIndividual
Role
Chairman of the Board
Non Independent & Non-Executive Chairman of the Board
Shares1,464,530
Max Price€4.96
Sell€2,191,51317 Sep 19
Johan van Zyl
EntityIndividual
Role
Chairman of the Board
Non Independent & Non-Executive Chairman of the Board
Shares450,000
Max Price€4.96
Buy€10,627,75814 Jun 19
Sanlam Limited Share Incentive Trust
EntityCompany
Shares2,257,000
Max Price€4.78
Buy€15,707,98311 Jun 19
Sanlam Limited Share Incentive Trust
EntityCompany
Shares3,472,800
Max Price€4.66
Sell€1,033,77310 Apr 19
Sanlam Limited Share Incentive Trust
EntityCompany
Shares215,802
Max Price€4.79
Sell€1,815,40319 Mar 19
Sanlam Limited Share Incentive Trust
EntityCompany
Shares389,005
Max Price€4.67

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • Ian Kirk (61yo)

    Group CEO & Executive Director

    • Tenure: 4.5yrs
    • Compensation: R22.52m
  • Lizé Lambrechts (55yo)

    Chief Executive Officer of Santam Limited

    • Tenure: 5yrs
    • Compensation: R13.30m
  • Temba Mvusi (64yo)

    Executive Director

    • Tenure: 11yrs
    • Compensation: R8.28m
  • Anton Gildenhuys

    Chief Actuary & Group Risk Officer

    • Tenure: 5yrs
    • Compensation: R10.26m
  • Danie Claassen

    Head of Group Tax Services

    • Heinie Werth (55yo)

      CEO of Sanlam Emerging Markets & Executive Director

      • Tenure: 3.3yrs
      • Compensation: R12.22m
    • Robert Roux (54yo)

      Chief Executive Officer of Sanlam Investments Management

      • Compensation: R17.07m
    • Wikus Olivier

      Interim Chief Financial Officer

      • Tenure: 0.4yrs
    • Jeanett Modise (56yo)

      Chief Executive of Human Resources & Executive Director

      • Tenure: 0.3yrs
    • Ainsley Moos

      Head of Group Communications and Operations Manager of Group Chief Executive Officer's Office

      • Tenure: 7.3yrs

    Board Members

    • Anton Botha (65yo)

      Independent Non-Executive Director

      • Tenure: 14yrs
      • Compensation: R1.43m
    • Sipho Nkosi (65yo)

      Lead Independent Non-Executive Director

      • Tenure: 3.1yrs
      • Compensation: R452.00k
    • Patrice Motsepe (57yo)

      Deputy Chairman

      • Compensation: R832.00k
    • Ian Kirk (61yo)

      Group CEO & Executive Director

      • Tenure: 4.5yrs
      • Compensation: R22.52m
    • Chris Swanepoel (69yo)

      Independent Non-Executive Director

      • Tenure: 9yrs
      • Compensation: R3.04m
    • Temba Mvusi (64yo)

      Executive Director

      • Tenure: 11yrs
      • Compensation: R8.28m
    • Johan van Zyl (63yo)

      Non Independent & Non-Executive Chairman of the Board

      • Tenure: 2.6yrs
      • Compensation: R1.13m
    • Heinie Werth (55yo)

      CEO of Sanlam Emerging Markets & Executive Director

      • Tenure: 3.3yrs
      • Compensation: R12.22m
    • Jeanett Modise (56yo)

      Chief Executive of Human Resources & Executive Director

      • Tenure: 0.3yrs
    • Junior Ngulube (61yo)

      Vice Chairman of Sanlam Pan Africa

      • Tenure: 0.4yrs
      • Compensation: R10.89m

    Company Information

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


    Key Information

    • Name: Sanlam Limited
    • Ticker: LA6A
    • Exchange: DB
    • Founded: 1918
    • Industry: Life and Health Insurance
    • Sector: Insurance
    • Market Cap: R169.170b
    • Listing Market Cap: R10.540b
    • Shares outstanding: 2.18b
    • Website: https://www.sanlam.co.za

    Number of Employees


    Location

    • Sanlam Limited
    • 2 Strand Road
    • Bellville
    • Western Cape
    • 7530
    • South Africa

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SLMA.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1998
    SLMJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARNov 1998
    SLANMSE (Namibian Stock Exchange)YesOrdinary SharesNAZARNov 1998
    LA6ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1998
    SLLD.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMar 2009

    Biography

    Sanlam Limited provides various financial solutions to individual, business, and institutional clients. The company operates through Sanlam Personal Finance, Sanlam Emerging Markets, Sanlam Investment Group, Sanlam Corporate, and Santam segments. It offers life, disability cover, income protection, severe illness, medical, short-term, and group risk benefits insurances; financial planning and retirement solutions; investment products; wealth, and professionals and graduates insurance services; and personal loans. It also provides business advice, business continuity and risk management, and employee health and retirement plans for small and medium businesses, and self-employed professionals. It operates primarily in South Africa, rest of Africa, and internationally. Sanlam Limited was founded in 1918 and is headquartered in Bellville, South Africa. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 20:56
    End of Day Share Price2020/01/17 00:00
    Earnings2019/06/30
    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.