MUN:D3H

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Discovery Limited provides various insurance products.


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: D3H's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.4%

D3H

-4.3%

DE Insurance

-3.6%

DE Market


1 Year Return

-27.0%

D3H

-8.3%

DE Insurance

3.7%

DE Market

Return vs Industry: D3H underperformed the German Insurance industry which returned -8.3% over the past year.

Return vs Market: D3H underperformed the German Market which returned 3.7% over the past year.


Shareholder returns

D3HIndustryMarket
7 Day-0.4%-4.3%-3.6%
30 Day0.1%-4.8%-2.0%
90 Day22.7%8.5%13.3%
1 Year-25.4%-27.0%-3.3%-8.3%6.0%3.7%
3 Year-34.4%-37.4%18.2%2.9%1.1%-6.9%
5 Year-38.5%-43.0%51.9%20.5%7.8%-6.8%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

9.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: D3H (€5.63) is trading below our estimate of fair value (€6.24)

Significantly Below Fair Value: D3H is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: D3H is poor value based on its PE Ratio (11.3x) compared to the DE Insurance industry average (10x).

PE vs Market: D3H is good value based on its PE Ratio (11.3x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: D3H is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: D3H is overvalued based on its PB Ratio (1.6x) compared to the DE Insurance industry average (1x).


Next Steps

Future Growth

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

20.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: D3H's forecast earnings growth (20.7% per year) is above the savings rate (0.2%).

Earnings vs Market: D3H's earnings (20.7% 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: D3H's revenue is expected to decline over the next 3 years (-6% per year).

High Growth Revenue: D3H's revenue is forecast to decline over the next 3 years (-6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: D3H's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has Discovery performed over the past 5 years?

7.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: D3H has high quality earnings.

Growing Profit Margin: D3H's current net profit margins (9.5%) are lower than last year (10.6%).


Past Earnings Growth Analysis

Earnings Trend: D3H's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: D3H's earnings growth over the past year (19%) exceeds its 5-year average (7.7% per year).

Earnings vs Industry: D3H earnings growth over the past year (19%) exceeded the Insurance industry 10%.


Return on Equity

High ROE: D3H's Return on Equity (14.2%) is considered low.


Next Steps

Financial Health

How is Discovery's financial position?


Financial Position Analysis

Short Term Liabilities: D3H's short term assets (ZAR119.2B) exceed its short term liabilities (ZAR35.0B).

Long Term Liabilities: D3H's short term assets (ZAR119.2B) exceed its long term liabilities (ZAR114.6B).


Debt to Equity History and Analysis

Debt Level: D3H's debt to equity ratio (27.8%) is considered satisfactory.

Reducing Debt: D3H's debt to equity ratio has increased from 9.2% to 27.8% over the past 5 years.

Debt Coverage: D3H's debt is well covered by operating cash flow (29.3%).

Interest Coverage: D3H's interest payments on its debt are well covered by EBIT (6.2x coverage).


Balance Sheet


Next Steps

Dividend

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

1.99%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: D3H's dividend (1.99%) is higher than the bottom 25% of dividend payers in the German market (1.25%).

High Dividend: D3H's dividend (1.99%) is low compared to the top 25% of dividend payers in the German market (3.83%).


Stability and Growth of Payments

Stable Dividend: D3H's dividends per share have been stable in the past 10 years.

Growing Dividend: D3H's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.8%), D3H's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: D3H's dividends in 3 years are forecast to be well covered by earnings (25.7% payout ratio).


Next Steps

Management

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

3.9yrs

Average management tenure


CEO

Adrian Gore (55 yo)

21.58yrs

Tenure

R19,393,776

Compensation

Mr. Adrian Gore, BSc (Hons), FFA, ASA, MAAA, FASSA, is the Founder of Discovery Health Proprietary Limited and serves as its Executive Director. Mr. Gore Founder of Discovery Limited and serves as the Grou ...


CEO Compensation Analysis

Compensation vs Market: Adrian's total compensation ($USD1.13M) is below average for companies of similar size in the German market ($USD2.51M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Adrian Gore
Founder21.58yrsR19.39m7.69%
ZAR 270.1m
Deon Viljoen
Group CFO3.25yrsR10.56m0.0015%
ZAR 53.4k
Barry Swartzberg
Executive Director21yrsR14.07m0.52%
ZAR 18.1m
Neville Koopowitz
Executive Director20.92yrsR2.60m0.15%
ZAR 5.1m
Alan Pollard
Executive Director13yrsR1.16m0.18%
ZAR 6.4m
Hylton Kallner
CEO of Discovery's South African Operations & Executive Director10.17yrsR17.91m0.015%
ZAR 537.1k
Jonathan Broomberg
CEO of Discovery Health & Global Head of Health Insurance0.58yrR11.90m0.017%
ZAR 593.0k
Ayanda Ntsaluba
Executive Director9.08yrsR12.69m0.014%
ZAR 482.3k
Kenny Rabson
Chief Executive Officer of Discovery Invest & Employee Benefits4.58yrsR12.77m0.11%
ZAR 4.0m
Derek Wilcocks
Group Chief Information Officerno datano datano data
Khalik Mayet
Head of Legal Servicesno datano datano data
Firoze Bhorat
Chief Marketing Officerno datano datano data

3.9yrs

Average Tenure

53yo

Average Age

Experienced Management: D3H's management team is considered experienced (3.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Adrian Gore
Founder21.58yrsR19.39m7.69%
ZAR 270.1m
Deon Viljoen
Group CFO3.25yrsR10.56m0.0015%
ZAR 53.4k
Barry Swartzberg
Executive Director21yrsR14.07m0.52%
ZAR 18.1m
Neville Koopowitz
Executive Director20.92yrsR2.60m0.15%
ZAR 5.1m
Alan Pollard
Executive Director13yrsR1.16m0.18%
ZAR 6.4m
Hylton Kallner
CEO of Discovery's South African Operations & Executive Director10.17yrsR17.91m0.015%
ZAR 537.1k
Ayanda Ntsaluba
Executive Director9.08yrsR12.69m0.014%
ZAR 482.3k
Mark Tucker
Independent Non-Executive Chairperson1.42yrsR1.48mno data
Hermanus Bosman
Non-Executive Director6.33yrsR1.45m0.012%
ZAR 412.1k
Sindiswa Zilwa
Independent Non-Executive Director17.5yrsR1.74m0.0035%
ZAR 121.9k
Sonja Emilia de Bruyn Sebotsa
Independent Non-Executive Director14.67yrsR1.25m0.010%
ZAR 352.0k
David Macready
Independent Non-Executive Director0.50yrno datano data

11.6yrs

Average Tenure

53.5yo

Average Age

Experienced Board: D3H's board of directors are seasoned and experienced ( 11.6 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: Discovery Limited
  • Ticker: D3H
  • Exchange: MUN
  • Founded: 1992
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: R71.035b
  • Listing Market Cap: R3.513b
  • Shares outstanding: 656.70m
  • Website: https://www.discovery.co.za

Number of Employees


Location

  • Discovery Limited
  • 1 Discovery Place
  • Sandton
  • Gauteng
  • 2146
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DSYJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZAROct 1999
DCYH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 1999
D3HMUN (Boerse Muenchen)YesOrdinary SharesDEEUROct 1999
DCYH.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDMar 2010
DSBPJSE (The Johannesburg Securities Exchange)ZAR0.001 B PREF SHS NON-CUMZAZARDec 2011

Biography

Discovery Limited provides various insurance products. The company offers health, life, car, and home insurance products. It also provides investment products and credit cards; and Vitality, which offers r ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/03 22:01
End of Day Share Price2020/08/03 00:00
Earnings2019/12/31
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.